cuts – BIG

Elon Musk is back in the news (is he ever not in the news?) over reports that he plans to cut some 75 percent of Twitter’s staff following the acquisition.

According to a report from The Washington Post , Musk told prospective investors in his deal to buy Twitter about his plans to cut staff. Currently, there are 7,500 employees at Twitter — the cuts would bring that down to around 2,000.

Job cuts were always on the table for Musk, although the latest numbers are far, far great than before. In June, a pitch deck hinted Musk aimed to cut around 900 jobs at Twitter. Moreover, the Post noted that Twitter management already had plans to cut the company’s payroll by about $800 million USD (roughly $1.1 billion CAD) by the end of next year, suggesting cuts were coming regardless of the Musk acquisition.

Beyond employees, Twitter reportedly planned to cut its infrastructure, including data centres, which help keep the website functioning for the over 200 million daily active users.

Still, Musk’s cuts are much bigger, and Twitter’s former head of spam and health metrics described them as “unimaginable” to The Post. Twitter users would likely notice the change right away, and that they would be at increased risk of hacks and exposure to offensive content.

Moreover, The Verge reported that several big names in private equity passed on Musk’s deal. That includes T. Rowe Price, TPG, and Warburg Pincus. LinkedIn founder Reid Hoffman also passed, as did Peter Thiel’s venture firm Founders Fund. (Both Hoffman and Thiel worked at PayPal, as did Musk.

Musk told investors he plans to double Twitter’s revenue in three years but didn’t explain how that would happen. I’d also like to know how Musk plans to do this after gutting Twitter’s staff and risking disruptions to the service.

The Twitter deal is expected to close on October 28th, and sources familiar with it told The Post that it’s moving forward in good faith after months of fighting.

Source: The Washington Post Via: The Verge

Tesla CEO Elon Musk plans to cut Tesla’s workforce by 3.5 percent.

Musk confirmed the number during an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum on June 21st. Over the next three months, Tesla will cut about 10 percent of its salaried workforce but expects to grow hourly staff, leading to an overall 3.5 percent workforce reduction.

Bloomberg notes that Tesla hired rapidly while building new factories in Austin, Texas and Berlin, Germany. The company has roughly 100,000 employees globally. The cuts have affected human resources representatives and software engineers.

The cuts reportedly took many by surprise, with the company terminating several employees immediately, according to Bloomberg. Two workers at Tesla’s Reno, Nevada battery factory alleged in a lawsuit that the company didn’t comply with the 60-day notification required by the States’ ‘Worker Adjustment and Retraining Notification Act.’

“Let’s not read too much into a preemptive lawsuit that has no standing,” Musk deflected when asked about the lawsuit during the interview.

The Tesla staff reductions come amid Musk’s stance against remote work. Musk has publicly derided work-from-home, and in an email cited by Bloomberg, wrote that Tesla employees are “required to spend a minimum of 40 hours in the office per week.”

Further, Musk claimed in the email that that was why he had “lived in the factory so much — so that those on the line could see me working alongside them.” Musk said if he hadn’t done that, Tesla would have gone bankrupt “long ago.”

Musk’s position on remote work similarly has Twitter employees spooked amid his ongoing attempt to purchase the company. Coupled with Musk’s suggestion there may be layoffs at Twitter if he acquires the company, it’s understandable that people are worried.

Source: Bloomberg