November 27, 2022

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Elon Musk wrestles with Twitter’s finances as executives exit

3 min read

Twitter suffered an exodus of the remaining top executives on Thursday, while its new billionaire Elon Musk warned bankruptcy was a possibility as he struggled to get the platform’s finances under control.

In one of the worst days for Twitter since Musk completed his $44 billion buyout of the social media company two weeks ago, its head of trust and safety, Yoel Roth, resigned, according to two people familiar with the situation .

Roth had become one of Musk’s trusted leaders after the Tesla boss laid off more than half of Twitter’s 7,500 employees last week, and had been instrumental in attempts to reassure suspicious advertisers that toxic content would not overwhelm the platform would.

Twitter’s chief information security officer, Lea Kissner, and chief privacy officer Damien Kieran both announced they were leaving Thursday, while Twitter’s chief compliance officer also stepped out, according to a person familiar with the matter. Robin Wheeler, who took over as head of Twitter’s ad sales team, has also left the company, according to multiple media reports.

Separately, in an all-hands meeting with some engineers on Thursday, Musk warned that the company could face billions of dollars in negative net cash flow, adding that bankruptcy is not out of the question, according to a person familiar with the matter . The comments were first reported by The Information.

“Honestly, it feels like chaos,” said one staffer, adding of the All-Hands, “It was just rambling incoherence.”

The stream of exits caps a turbulent fortnight for Twitter as concerns mount over data security and privacy compliance, especially given the speed at which the platform has rolled out some features since Musk acquired it.

The U.S. Federal Trade Commission, a leading consumer protection agency, said Thursday it was “following with great concern recent developments on Twitter.” Twitter signed a strong compliance statement in 2011, pledging to better protect user data, which the regulator continues to monitor.

“No CEO or company is above the law, and companies must follow our consent regulations,” the FTC added. “Our revised Consent Order gives us new tools to ensure compliance and we stand ready to use them.”

Separately, a company attorney warned on the company’s Slack channel that Musk is taking a cavalier stance on privacy regulations and that the company could potentially risk significant fines from the FTC, according to a report by The Verge, which was corroborated by a person who used the viewed the post.

Regulatory concerns aside, Musk, a self-proclaimed “free speech absolutist,” faces an uphill battle to revive Twitter’s already ailing business.

As early as Friday, he warned of a “massive drop in sales” as major brands including General Motors, Mondelez and Carlsberg halted spending on the platform over concerns about his plans to ease content moderation.

He’s also facing $1 billion in annual interest payments after charging the company $13 billion in debt to fund his acquisition of the company.

Meanwhile, Musk’s attempts to find new revenue streams have encountered hurdles. The launch of Twitter Blue, a premium subscription service that costs $7.99 per month and includes a “blue check” previously only available to high-profile users, brands, and celebrities, has already prompted a few attempted impersonations. Eli Lilli he apologized “to those who were delivered a misleading message from a fake Lilly account” stating that the drugmaker was giving away free insulin.

Critics warn that moving away from the previous blue-check model will also alienate the celebrities Twitter needs to win over their audience.

Musk first addressed Twitter employees Thursday in an email available to the Financial Times, warning that the social media platform would need “intense work” in the office to turn around its fortunes .

He added that he was scrapping his work-from-home policy and requiring employees to work 40 hours a week in the office, which would severely shake up his work practices.

At Thursday’s all-hands meeting, Musk added that not entering the office would be considered tantamount to filing a resignation, one person said. The departures were first reported by The Verge and Platformer.

Twitter did not immediately respond to a request for comment.

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