Elon Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit

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Bring in more money than spend - This is how Elon Musk swears in his employees. Twitter could therefore probably face billions in losses.

elon musk twitter bankruptcy

Elon Musk, the tech billionaire, has not ruled out the online service going bankrupt just weeks after the $44 billion Twitter takeover. 

According to media reports, he warned employees on Thursday that Twitter's balance sheet could face a billion-dollar gap in the coming year during an appearance in front of them.

If, under these circumstances, it is not possible to bring in more money than we spend, "insolvency cannot be ruled out," Musk quoted the financial service Bloomberg as well as the tech media "The Information" and "Platformer". Twitter was already in the red before the takeover.

Musk complains about a drop in sales

Musk lamented a drop in sales following the transaction because some major advertisers suspended ads on the platform. 

They are concerned that if Musk relaxes content rules as announced, their advertisements will appear alongside offensive tweets.

The loan of around $ 13 billion that Musk took out for the purchase also weighs on Twitter. According to media reports, servicing this debt costs around one billion dollars a year.

Under Musk, Twitter relies on a subscription model

The tech billionaire hopes to supplement advertising revenue, which has accounted for 90% of revenue thus far, with a subscription business. 

The initial chaos caused by the launch of his new subscription with a verification check mark was caused by some users imitating celebrities and companies with deceptively real-looking fake accounts.

Musk had previously warned employees of difficult times in an email. The economic situation is "bad", especially for a company that depends on advertising revenue.

Musk is removing the Work from Home option for employees

Musk also announced new guidelines for working from home in the memo, stating that in the future, working from home will be permitted only with his express personal permission. 

Employees must work at least 40 hours per week, according to the memo, which has been widely reported in the US media.

Prior to the takeover, Twitter employees could work from anywhere. Musk is a vocal opponent of the home office trend, as evidenced by his electric car company, Tesla. 

Musk also laid off nearly every second of Twitter's approximately 7,500 employees last week.

According to the reports, he now said that the company still had too many employees in some cases. Two other key executives left the company on Thursday: Yoel Roth, who was responsible for filtering out objectionable content, and Robin Wheeler, who was recently in charge of advertiser relations.

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