Elon Musk stated on Wednesday that he expects to spend less time at Twitter and eventually select a new leader to oversee the social media firm, and that he hopes to finish an organizational restructuring this week. The comments were made while the billionaire was testifying in a Delaware court to defend himself against allegations that his $56 billion compensation package at Tesla Inc (Nasdaq: TSLA) was based on easy-to-attain performance benchmarks and was approved by a compliant board of directors.
“There’s an initial burst of activity needed post-acquisition to reorganize the company,” Musk said in his testimony. “But then I expect to reduce my time at Twitter.”
However, there’s no clarity yet on the timeline. In a follow up tweet, Musk clarified that he will continue to run the social media platform “until it is in a strong place, which will take some time.”
This follows a company memo undersigned by Musk that circulated, stating that the firm will have “to be extremely hardcore” to succeed.
“This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade,” the memo read.
Musk also said that the platform will “be much more engineering-driven” moving forward, with code writers making up most of the team. The memo included a link to a Google Form for Twitter employees who will agree to the new direction; those who won’t or fail to do so will be fired and get a three-month severance pay.
Earlier in the week, Musk relayed the plan to let Twitter employees –those that remain at least– continue to receive stock and options as part of their remuneration even if the company is now private. The compensation plan will be patterned after the billionaire’s other private company, SpaceX, which gives its employees stock awards twice a year that they can sell anytime the company performs secondary offerings.
“Even though Twitter is now a private company we absolutely will continue to provide stock and options as part of our ongoing compensation plan,” Musk said. “The stock plan will be much like that of SpaceX, which has been very successful.”
As soon as Musk took over, the platform has been in a rapid and unprecedented workforce shuffle–from firing top executives including former CEO Parag Agrawal, to laying off around 3,700 employees in one of the tech world’s largest tech job cuts. He was also reportedly asking employees to a meeting with one-hour notice, rumored to be warning them that if they don’t show up, their resignations will be accepted instead.
On top of job cuts and intensive human resource management, Twitter has reportedly terminated around 4,400 of its 5,500 contract workers in a sudden fashion. Platformer’s Casey Newton, who broke the story, noted that contractors were not notified of their termination — at least not before finding out that they have lost access to their company email and Slack accounts.
Among the drastic changes that Musk implemented includes the chaotic $8 per month blue checks, which was immediately pulled back after a surge of fake accounts with a verified check populated the platform.
But another major thing that Musk has the Twitter team working on is allowing users to post longer tweets–a deviation from the platform’s differentiator after the limited character feature ushered the need for creative ways to shorten one’s post, as well as its value for the currency of the content.
Musk has been discovered to have explored placing the entire site behind a paywall in another attempt to generate more revenue for the social media platform. Paywalls are usual gate tools for pay-for-content websites, most notably news outfits. While social media platforms have tiered pricing for additional features, paywalls are not common, if not present, in them.
The billionaire is ramping up revenue streams for Twitter after his acquisition of the platform, for which he has said more than once that he overpaid. Most recently, Musk had to sell 19.5 million Tesla shares over the three market days, generating cumulative gross proceeds of $3.9 billion.
In financing the $44-billion takeover, Musk placed slightly more than $27 billion of his own cash in the acquisition.
Around $5.2 billion comes from bank loans including from Morgan Stanley, Bank of America, Japanese banks Mitsubishi UFJ Financial Group and Mizuho, Barclays and the French banks Societe Generale and BNP Paribas. Morgan Stanley alone has contributed $3.5 billion.
These loans are guaranteed by Twitter, and it is the firm, not Musk himself, which will carry the financial burden to pay them back.
But the other part of the financing involves $5.2 billion from investment organizations and other significant entities, including $1 billion from Larry Ellison, co-founder of software company Oracle.
Other members of this consortium include foreign investors like Prince Alwaleed bin Talal of Saudi Arabia, Chinese native-run Binance Holdings Ltd., and Qatar’s sovereign wealth fund. The presence of these non-American investors is causing a stir in the White House for fear of foreign intervention and surveillance.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.