Elon Musk to start mass layoffs at Twitter on Friday

Twitter sent employees an email Thursday notifying them that layoffs would begin on Friday morning, according to multiple news reports including The New York Times.

The email told employees not to come into the office on Friday as the layoffs begin. The cuts will affect roughly half of Twitter’s workforce, according to The Times, which cited an investor and internal messages.

“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday. We recognize that this will impact a number of individuals who have made valuable contributions to Twitter but this action is unfortunately necessary to ensure the company’s success moving forward,” the email stated, according to The Information.

The move comes as Musk attempts to improve Twitter’s consistently unimpressive margins following his $44 billion acquisition of the firm. Musk, who says he overpaid for Twitter, has already made significant changes to the business that he first attempted to wriggle out of buying. Shortly after taking over, Musk fired Twitter CEO Parag Agrawal, CFO Ned Segal, general counsel Sean Edgett, and legal policy head Vijaya Gadde.

The executives were reportedly fired for cause, though Musk hasn’t publicly accused the executives of any wrongdoing. According to Business Insider, the Tesla CEO hopes to avoid making the executives’ contractually binding golden parachute payments that would cost the company tens of millions of dollars.

The mercurial billionaire has few choices but to turn Twitter’s fortunes around if he wants to pay off his $13 billion in debt, which is estimated to cost approximately $1 billion a year.

In its last quarter as a public company, Twitter reported a revenue decline of 1% year-over-year to $1.18 billion. The social media company also reported a net loss of $270 million representing a 23% net margin decrease. Costs and expenses, meanwhile, totaled $1.52 billion, at a 31% year-over-year jump.

In addition to slashing Twitter’s workforce, Musk is hoping to increase margins by charging users for the blue check marks that signified the service has verified their identity. Initially, the new Twitter chief considered charging users $20 a month for the mark.

But after pushback from users, and famed author Stephen King, Musk lowered the price to $8 per month. The CEO says that charging verified users is the only way to “defeat bots and trolls.”

Elon Musk and Stephen King exchange tweets regarding Musk's plans to charge $20 for verification check marks.  (Image: Howley)

Elon Musk and Stephen King exchange tweets regarding Musk’s plans to charge $20 for verification check marks. (Image: Howley)

As commentators like Bloomberg’s Mark Milian have pointed out, Musk isn’t the first executive to propose charging a fee for a service to eliminate spam. Microsoft founder Bill Gates famously considered charging users a fee if their emails were rejected as spam. That plan, however, never came to fruition.

Musk has already kick-started plans to address Twitter’s vexing content moderation policies by empaneling a moderation council composed of people who he says hold a variety of viewpoints, and by talking with civil rights leaders. On Thursday, according to CNBC, Musk held a meeting with executives from the Anti-Defamation League, Asian American Foundation, Color of Change, NAACP, as well as the media reform advocacy group Free press.

The CEO previously said he was buying Twitter to open up speech on the platform, which some advertisers and users feared could turn the entire site into a no man’s land of hate and disinformation.

Musk has since said that he wants the platform to be a warm and welcoming place and not an unmoderated “hellscape.”

By Daniel Howley, tech editor at Yahoo Finance. follow him @DanielHowley

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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