YIKES
About 7,500 people currently work at Twitter — and 75 percent of them can expect to be shown the door, The Washington Post reports. Elon Musk, who is acquiring the company, has been telling prospective investors that he plans drastic firings to bring down costs.
Musk has a deadline to close the purchase of Twitter by October 28th. In a sign the deal is proceeding, Twitter froze its employees’ equity awards, Bloomberg reported. Anonymous sources tell The Post that the deal is moving forward in good faith.
Job cuts were planned anyway. Before Musk’s bid, Twitter management planned to slice almost a quarter of the workforce, chopping $800 million from payroll. Musk’s planned cuts, which are larger, are “unimaginable,” the former head of Twitter’s spam and health metrics told The Post. Users would likely notice immediately — as Twitter is likely to experience more hacks, for instance. Musk plans to implement stack ranking, the practice famously ended at Microsoft in 2013 because it contributed to a bad culture, to shrink headcount.
Musk has said he is “obviously overpaying” for Twitter, and a general partner at one of the firms involved in the deal told Business Insider that “We’re all trying to get out of it, to be honest.” The plan is to double revenue in three years, The Post says Musk told investors, without explaining how that will happen.
Lots of big names in private equity have passed on the deal: T. Rowe Price, TPG, and Warburg Pincus. PayPal mafia member Reid Hoffman, who later founded LinkedIn, didn’t invest — though he did hook Musk up with Microsoft CEO Satya Nadella. Founders Fund, the signature venture firm of PayPal mafioso Peter Thiel, also passed, The Post reports.