According to a report, Elon Musk plans to fire most of Twitter’s employees if and when he becomes the owner of the social media company.
Mr. Musk has told potential investors in his Twitter purchase that he plans to cut nearly 75% of Twitter’s 7,500-strong workforce, leaving the company with a bare-bones team, The Guardian reported..
The newspaper cited documents and unnamed sources familiar with the discussions.
Twitter, which employs more than 500 people in Dublin, told staff there were no plans for company-wide layoffs since Tesla’s CEO signed the acquisition deal.
In a memo, Twitter general counsel Sean Edgett warned workers to expect “tons of public rumors and speculation” as the deal nears.
“We have no confirmation of the buyer’s post-closing plans and we recommend not following rumors or leaked documents, but waiting for the facts from us and directly from the buyer,” he said.
San Francisco-based Twitter and a spokesman for Mr. Musk’s lawyer, Alex Spiro, did not immediately respond to messages seeking comment.
While job cuts were expected regardless of the sale, the scale of Mr. Musk’s planned cuts is far more extreme than what Twitter had planned.
Mr. Musk himself has hinted in the past about the need to lay off some of the company’s staff, but has not publicly named a specific number.
Wedbush analyst Dan Ives said: “The 75% reduction in headcount would indicate, at least initially, stronger free cash flow and profitability, which would be attractive to investors looking to get involved in the deal.
“That said, you can’t shortchange your way to growth.”
Mr. Ives added that such drastic cuts to Twitter’s workforce would likely set the company back years.
Experts, nonprofits and even Twitter employees have already warned that deinvesting in content moderation and data security could hurt Twitter and its users.
With the kind of drastic cuts that Mr Musk may be planning, the platform could quickly become overrun with harmful content and spam – the latter of which Tesla’s CEO himself has said he will decide when he takes over the company.
After his initial bid to buy Twitter for $44bn (£39bn) in April, Mr Musk backed out of the deal, claiming Twitter had misrepresented the number of fake “spambot” accounts on its platform.
Twitter sued, and a Delaware judge gave both sides until Oct. 28 to work out the details.
Otherwise, there will be a trial in November.