Musk moves quickly to shake up Twitter with plans for cuts

Musk moves quickly to shake up Twitter with plans for cuts

Elon Musk has set in motion plans for broad layoffs at Twitter, according to people familiar with the matter, as the billionaire entrepreneur began shaking up the social media company just days after closing a $44 billion buyout of the platform.

Musk has asked executives and advisers to name who will stay and who will be fired, according to two people familiar with the matter. Musk is not seeking a fixed percentage of layoffs from Twitter’s 7,500-strong workforce, the people said. Rather, he wants to fire those who do not support him as leader, according to one of the people.

A representative for Musk declined to comment.

The planned layoffs come after Musk closed the deal to take the San Francisco social media group private Thursday night and immediately fired several top executives, including Parag Agrawal, chief executive officer, and Vijaya Gadde, head of legal, policy and trust.

Under the terms of the merger agreement, the executives were expected to receive golden parachutes — nearly $60 million in Agrawal’s case. However, Musk fired the executives “for cause,” two people familiar with the situation said, meaning he claimed to have a valid legal justification for doing so and therefore the payouts can be voided.

In this case, Musk’s argument is that Twitter has been mismanaged and that if it weren’t for his bid, the value of the company’s stock would have collapsed, one of the people said. The executives, according to a person familiar with their thinking, are weighing their legal options over the decision. Denial of severance pay related to acquisitions is unusual and the “for cause” clause usually requires misconduct to have occurred.

The completion of the $44 billion deal marks the start of a new era for Twitter in which the CEO of Tesla and SpaceX will seek to overhaul its struggling business, increase product innovation and make changes to its content moderation.

Musk, now calling himself “Chief Twit,” was active on Twitter over the weekend, sharing a penis meme, mocking an automated Twitter message apparently sent to him but meant for new hires, and hinting at upcoming policy changes.

When asked to identify the “most messed up” thing on Twitter, he hinted at cutbacks to come: “There seem to be 10 people ‘managing’ for every person coding.”

On Sunday afternoon, he also said it was “bogus” that layoffs would take place before Nov. 1 — the next vesting date for employee stock grants — to avoid giving ousted employees their full pay.

Inside Twitter’s headquarters, Musk has begun populating a “war room” of trusted lieutenants to help him assess and better understand the inner workings of the business before deciding what action to take. Handling legal and policy matters at the company is Alex Spiro, Musk’s outspoken personal attorney, who appeared with Musk at Twitter’s headquarters in San Francisco on Friday, two of the people said.

Musk, meanwhile, has focused on technology and the product. In private messages disclosed in court filings, he has previously suggested that he would appoint no C-suite management positions at all and personally “oversee software development.”

David Sacks, a venture capitalist and close associate of Musk, is also part of the team backing Musk, four people said. Antonio Gracias, a former Tesla executive who founded private equity group Valor Equity Partners, is advising him, one of the people said.

Sriram Krishnan, a venture capitalist at a16z and former director of product at Twitter, also tweeted and confirmed that he was “temporarily helping” Musk “with some other great people”. He added: “I (and a16z) believe this is a hugely important company and can have a huge impact on the world and Elon is the person to make it happen.” Silicon Valley-based a16z was one of the equity backers of Musk’s deal to buy the company.

The New York Times first reported news of the war room, the layoff plans and some of Musk’s team. The Information first reported that the Twitter executives were fired “for cause.”

Rumman Chowdhury, Twitter’s head of machine learning ethics, transparency and accountability, on Friday confirmed media reports that Twitter engineers were told to print out the past 30 to 60 days of code so they could review it with Musk himself, before being told to shred the pages instead. Another employee posted a selfie next to pages of code being printed, with the phrase “Happy Friday all”.

Twitter’s source code is temporarily locked down, except for critical changes, until early next week to prevent staff from going rogue during the handover, the people said.

Musk, a self-proclaimed “free speech absolute,” has already faced concerns over his plans to loosen Twitter’s moderation policies, particularly from advertisers who don’t want their marketing to run alongside toxic content.

On Sunday, he retweeted a post by Twitter’s current head of security and privacy, Yoel Roth, who stated that the company’s policies prohibiting hateful content had not changed. He added that Twitter had removed a small group of mainly fake accounts that had carried out a “trolling campaign” by posting obscenities in the wake of the deal.

Last week, Musk also promised to create a moderation council with “widely diverse views” and said “no major content decisions or account reinstatements will happen before that council meets”.

Musk deleted a tweet he sent early Sunday that reinforced an unsubstantiated theory that Speaker Nancy Pelosi’s husband was assaulted by a male prostitute rather than a deranged assailant in his home on Friday. “There is a small possibility that there may be more to this story than meets the eye,” Musk wrote early Sunday before deleting it hours later.

Internally, some rank-and-file employees were disappointing. One described the atmosphere as full of trepidation. Another expressed fear of being fired, saying it was demoralizing to see other Twitter executives go to Musk.

Twitter did not respond to requests for comment.

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