Twitter will have new paid services: Why does Musk order to save 1 billion dollars year?

November 4, 2022  16:15

Twitter plans to offer its users new and paid features, and the company's new CEO Elon Musk ordered to save about 1 billion euros a year, which, according to some experts, could seriously hamper the company's work in especially intense periods. At the same time, several large companies are already refusing to advertise their products on Twitter.

According to The New York Times, the ability to send individual messages to celebrities and watch certain videos could become paid.

A $13 billion loan with a high interest rate

Discussions about paid features began shortly after Elon Musk acquired Twitter. According to the publication, the moves are aimed at generating a quick profit, as Musk took out a $13 billion high-interest loan to complete the deal.

As part of that loan repayment, the company also plans to halve the number of employees, and the layoffs are expected to begin as early as today, Nov. 4. According to The New York Times, emails about the layoffs have already been sent to some employees.

"In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global work force. 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 newspaper quoted part of the email sent to some employees.

Since November 2, the price of a monthly subscription to have a verified Blue account on Twitter has already risen from $5 to $8, although in the early days of the acquisition of Twitter, Musk ordered employees to make the account Blue subscription $ 19.99.

Major companies are turning down ads on Twitter

 Rob Norman, a former employee of British advertising company WPP, previously wrote in his column for The New York Times that Musk's ideas to make Twitter a freer platform for self-expression could lead some major advertisers to stop allocating money to promote their products on Twitter.

Several major companies, including General Mills (which owns the food brand Nestle), Mondelez International (known for Oreo cookies), pharmaceutical giant Pfizer and automaker Audi, have already decided to stop advertising their products on Twitter.

Save $1 billion a year

According to Reuters, Elon Musk, who bought Twitter just a week ago, is forcing lower-level executives to seek reserves to reduce the company's infrastructure spending by $1 billion a year. This will presumably be done by cutting costs on cloud services and leasing space for data centers.

According to The Washington Post, the messenger Slack, which is used by Twitter employees, the new management said that it has set a goal to save up to $3 million a day on infrastructure. The minimum infrastructure cost savings goal was set at $500 million a year, and that goal is expected to be met by, among other things, reducing the costs paid to contractors for moderating content.

Some experts are concerned that Twitter is unlikely to be able to ensure stable operation after such measures, because the infrastructure simply cannot cope with a large flow of users during periods of high activity using the network. And such high activity is observed during elections or other actively discussed events.

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