Twitter owner and CEO Elon Musk is defending the major changes that he has made at the platform since taking it over, saying they were aimed at turning around a significant revenue shortfall at the social media giant.
Musk said during a Twitter Spaces chat Wednesday that the company was headed for a « negative cash flow situation of $3 billion a year » when he took the helm, explaining, « So that’s why I spent the last five weeks cutting costs like crazy. »
The billionaire, who also heads electric vehicle behemoth Tesla, immediately began slashing Twitter’s workforce after he purchased the company in late October. Within weeks, roughly two-thirds of the platform’s original 7,500 employees were out of a job.
In addition to cutting costs through terminations and ending some perks at Twitter headquarters, Musk has made a number of moves aimed at increasing revenue, such as charging for verification for users.
The new Twitter owner acknowledged that his actions « may seem sometimes spurious or odd or whatever, » but he said they were necessary because « we have an emergency fire drill on our hands. »
Musk said he had to make drastic changes at Twitter because otherwise the company was headed for disaster. From his standpoint, he said, it was like being « in a plane that is headed towards the ground at high speed with the engine on fire and the controls don’t work. »
But now he believes Twitter should be back on track financially in 2023.
« With the changes that we’re making here on massively reducing the burn rate and building subscriber revenue, I now think that Twitter will, in fact, be OK next year, » Musk said during the Spaces discussion. « I think we will be… roughly cash-flow break-even — that’s what I expect for next year. »
Musk said earlier this week that he will resign as CEO of Twitter as soon as he finds a replacement, after Twitter users voted in a poll for him to step down.