Elon Musk, layoffs in Twitter: what does future hold for company?

October 21, 2022  11:48

After acquiring Twitter, Elon Musk intends to cut three quarters of the company's employees. As he stated before, based on this platform, he intends to create a super application similar to Chinese WeChat and double the income in three years.

As The Washington Post notes, even before the negotiations with Elon Musk, Twitter's management was considering cutting a quarter of the company's employees in order to reduce personnel costs by $800 million by the end of 2023. Musk intends to go further and fire three quarters of Twitter employees; 5,000 employees will be laid off, after which about 2,000 people will remain in the company.

It is also planned to reduce Twitter's expenses for infrastructure maintenance, such as data centers. They can also refuse the services of contractors who perform various works, for example, moderation.

How will the layoffs affect Twitter's performance?

As The Washington Post reports, experts believe that large-scale layoffs are unlikely to have a good effect on the company's work. Most likely, the remaining of the employees will be demoralized by what happened, and some of them may voluntarily leave the company, and the work efficiency of the remaining employees will probably decrease noticeably.

Despite such predictions, Musk is confident that he can turn Twitter into a thriving company. He plans to double the company's revenue in three years. Also, he wants to triple the number of users viewing ads.

Some of Musk's proposed reforms seem highly controversial to experts. Time will tell what results they will lead to.

Is Twitter the future 'X' super app?

Musk said that he plans to create a super application based on Twitter. Personally, Musk calls his idea, tentatively called "X", "app for everything".

He has not revealed his idea in more detail yet, but it can be assumed that this is a large-scale project modeled after the Chinese WeChat, which is a universal service and will combine the capabilities of Facebook, Twitter, Instagram, Substack, and Uber.

Musk has previously raved about how Tencent has turned the messenger into a "mini Internet" that more than a billion Chinese people use every day. He also spoke more than once about the super applications spread in Asia, which provide an opportunity to solve various problems in one place - starting from communication and watching various contents, and ending with calling a taxi.

The Twitter acquisition deal is scheduled to be completed by October 28. After alleged attempts to lower the price, attributed to Musk, he was forced to agree to buy the company for $44 billion ($54.20 per share). However, according to some experts, the fair capitalization of Twitter does not exceed $12 billion.

Musk himself also noted that he is paying more for the company than it is worth, but Twitter's potential value is "significantly higher than its current value."

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