SAN FRANCISCO — Before Elon Musk bought Twitter last month, company executives had collected hundreds of thousands of dollars in travel bills that the social media service was supposed to pay.
But once Musk took over the company, it refused to reimburse those bills to travel agents, current and former Twitter employees said. A Musk staffer said the service was approved by the company’s former management, not him.
Musk has embarked on a massive cost-cutting campaign since completing its $44 billion acquisition of Twitter. He initially cut half of his 7,500 employees at the company, laying off workers and continuing layoffs as recently as Monday. But he also dug into all sorts of other costs for the company, telling staff to review, renegotiate, and in some cases not pay Twitter’s outside vendors at all, the person familiar with the matter said. eight officials said.
Musk and his advisors have looked at Twitter’s underlying infrastructure, travel costs, software services, real estate, and even the computing costs that support the typically lavish in-house cafeteria meals. Twitter spending has declined, but the move has fueled complaints from insiders.
Musk’s actions reflect the financial pressure Twitter is under. The company took his $13 billion loan for his network acquisition of Social. Interest payments on that debt total him over $1 billion a year. Twitter has also been in financial trouble for a long time, often losing money and struggling to keep up with rivals such as his Facebook and Google, who have effectively monetized their advertising products. To evaluate Musk’s ownership, some advertisers have paused his spending on Twitter.
Musk, 51, told a Twitter employee that “the economic outlook is dire” and bankruptcy of the company may be in the cards.
He didn’t respond to a request for comment.
Past Twitter leaders have tried to make the company profitable through strategies ranging from promoting live video to a suite of audio services. Musk’s plan was more rigorous. Antonio Gracias was a longtime confidante and former director of electric car maker Tesla. Jared Birchall, head of Musk’s family office; And Musk’s Tunnels Steve Davis, who heads his project Boring Inc., is taking a closer look at the books on Twitter.
Their instructions were simple: cut, cut, cut.
That led to mass layoffs on Twitter this month. And behind the scenes, there is no cost to go off the table.
Twitter’s slashed-back finance team has been instructed to scrutinize company expenses and employee expense reports “line by line,” said a person familiar with the matter. They are asked to clarify that their employees and their expenses are those of “real people and actual expenses.”
Musk has also issued orders to delay or in some cases stop sending funds to Twitter’s vendors and contracted services, the people said. All spending on the service must be approved by Birchall, three people said. Musk has since refused to pay for travel services paid for by former Twitter executives, the people said.
He’s also considering leasing office space at the company, refusing to pay and hoping to renegotiate or opt out of some contracts altogether, according to three people familiar with the matter. Twitter leases office space around the world, but the layoffs have significantly reduced its need for real estate.
Twitter’s partnerships team has also been instructed to renegotiate multi-year content deals with major sports organizations, such as the deal with the NFL, where the social media company will provide exclusive audio and video content for the platform. pays the league to produce . Twitter has similar deals with other media companies, including Condé Nast, the NBA and Fox Sports Network.
An NFL spokesperson has no comment at this time.
Boring President Davis also instructed Twitter employees to renegotiate contracts with companies such as Amazon and Oracle that provide computing and technology services. Employees were told to suggest that Musk’s companies not work with them in the future if they refused to renegotiate, they said.
After Twitter’s contract with a software vendor under Musk’s ownership expired, the company voided the discount it gave Twitter, an engineering manager said.
Representatives for Amazon and Oracle did not respond to requests for comment. Emails to Boring Co. were not immediately returned.
Twitter employees’ corporate credit cards have also been blocked, three of the people said. One worker said he tried to buy a farewell drink for his colleague after a mass layoff, but his company credit card was declined at the bar.
When Musk called on Twitter employees to return to the company’s San Francisco office to meet with him last week, some employees expressed concerns about booking travel with personal credit cards and refused to issue refunds. Under Musk’s ownership, Twitter has delayed payments or rejected expense reports submitted for approval, said four incumbents and former employees. employee said.
Musk has ended his other longtime perks on Twitter. He cut back on the free lunch. This cost the company more than $400 “for each lunch served,” he said. (One of his employees who worked on the company’s lunch program disputed Mr. Musk’s calculations.) On Monday, Twitter’s New York office previously featured grilled shrimp and more. Two types of macaroni and cheese and a salad bar were served to one of him in the cafeteria. Said.
Other benefits, such as subsidized gym passes, cell phone and internet bills, and childcare benefits, were also cut, the two said.
Musk’s team, including Musk’s personal attorney Alex Spiro, has linked Twitter to several outside law firms that worked with former management of the company in a lawsuit surrounding its $44 billion acquisition. has ended, said a person familiar with the move. Earlier this year, Twitter sued Musk after he tried to back out of an agreement to buy his company.
Spiro did not respond to a request for comment.
Some of Twitter’s social projects are also beginning to falter. Twitter for Good, the company’s philanthropic arm, has lost many employees and some nonprofits have not received the checks they promised, two of his people said. The San Francisco Standard previously reported on the issue of Twitter’s philanthropy.
“Elon has indicated that he is only interested in recouping the losses he suffered because he was unable to escape his binding obligation to acquire Twitter,” an employee said earlier this month on Twitter’s internal messaging system. I wrote to Slack.
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