Twitter is drafting broad job cuts, days after Elon Musk’s acquisition

Twitter Inc. drafting plans for large-scale layoffs, according to people familiar with the matter, days after the end of Private social media platform has been hacked from billionaire

Elon Musk

for $44 billion.

One person said the proposed layoffs are expected to reduce engineering jobs as well as affect other areas of the company. Twitter has approximately 7,500 employees, according to a disclosure earlier this year. The full size of the cuts being discussed cannot be determined.

Earlier this year, Twitter said it He was looking for ways to cut costs due to the macroeconomic environment, adding that hiring slowed significantly in the second quarter, according to a July Securities and Exchange Commission filing. Social media companies have suffered from market turmoil impacted digital advertising spending This year, including high inflation and fears of recession and war in Ukraine.

Twitter has posted a loss in eight of the past 10 financial years, according to FactSet. The New York Times previously reported on Twitter’s plans for job cuts across the company.

Mr. Musk He told the staff in June He believes the costs were “not a great situation” on Twitter, according to people who watched a virtual meeting at the time. He didn’t rule out layoffs, adding that anyone who contributes significantly shouldn’t worry, according to the people.

Several employees said they were concerned that Mr. Musk might move to cut jobs before November 1, the due date for Twitter’s compensation program. The employee grants were expected to be paid in cash after Mr Musk’s acquisition, according to people familiar with the case. A number of employees said they were concerned that Mr. Musk might try to avoid making those payments if their employment was terminated before November 1.

Before the deal was struck, employees whose jobs were cut off generally expected to receive cash for equity that could have been granted within three months of leaving the company, plus the rest of the termination package, according to an internal memo reviewed by The Wall Street Journal.

As part of Mr. Musk’s control, Twitter added $13 billion in debtWhich analysts say will increase pressure to cut costs and increase revenue. Analysts estimate, based on terms previously set forth in documents relating to the transaction, that Twitter will be on the hook for annual interest payments of more than $1 billion, compared to about $51 million in 2021. Twitter has published its average annual earnings before interest, taxes Depreciation and amortization are estimated at $700 million over the past five years.

write to Alexa Corse at [email protected]

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