Elon Musk is still the same Elon Musk, but Twitter has made him “unrecognizable”.
On Oct. 28, just hours after Elon Musk completed his acquisition of Twitter the night before, he summoned several human resources executives to the “war room” of Twitter’s San Francisco office. Six people familiar with the matter said Elon Musk told them to prepare for massive layoffs. He said Twitter needed to lay off employees immediately and that those laid off would not receive bonuses that were scheduled for Nov. 1.
Twitter executives warned their new boss that his plan could violate the Employment Act, breach the company’s contracts with employees and trigger lawsuits from employees, people familiar with the matter said. But Elon Musk’s team said he was used to going to court and paying fines and wasn’t worried about the risks. As a result, Twitter’s human resources, accounting and legal departments were scrambling to find a way to comply with his order.
Two days later, Elon Musk’s learned exactly how costly these potential fines and lawsuits could be. Delays were mounting as Twitter managers haggled over which employees should be fired. So Elon Musk decided to wait until after Nov. 1 before laying off employees.
The immediate layoff order, and the ensuing panic and shift in attitude, reflect the chaos Twitter has been in since Elon Musk took over the company two weeks ago. The 51-year-old CEO came up with ideas for how Twitter should be run, but no comprehensive plan for executing them. Then he quickly learned the business, legal and financial complexities of running a platform known as the “global town square.
Compared to a month ago, Twitter is a different place. Last week, Elon Musk laid off about half of its 7,500 employees, and executives continue to resign. During Tuesday’s midterm elections, Twitter saw a spike in disinformation. Meanwhile, a key project for Twitter to expand subscription revenue has hit a roadblock. Some advertisers are alarmed at the state of Twitter.
A painful process
According to information from 36 current and former Twitter employees, people close to the company, as well as internal documents and workplace chatter, the consequences of Elon Musk’s overhaul of Twitter were often painful. Some executives were fired outright by email. One engineering manager vomited into a trash can when he was told to lay off hundreds of workers. Others slept in their offices, working exhaustingly to meet Elon Musk’s demands.
On Oct. 26, Elon Musk walked through the building’s glass doors to Twitter’s San Francisco office holding a white porcelain sink. “Immersion.” He tweeted at the time, accompanied by a video of his grand entrance.
Elon Musk enters Twitter’s headquarters holding a sink
Leslie Berland, Twitter’s chief marketing officer, encouraged employees to say hello to Elon Musk and escorted him through the offices. He was seen chatting with employees in the company’s coffee bar.
But the mood soon changed. The next day, Twitter CEO Parag Agrawal and CFO Ned Segal were both in the office, two people familiar with the matter said. When they learned that Elon Musk’s acquisition of Twitter had been completed that afternoon, they left the building, unsure of what the new boss would do.
Soon after, Agrawal and Segal received emails saying they were fired. Vijaya Gadde, Twitter’s chief legal and policy officer, and Sean Edgett, general counsel, were also fired. Edgett was in Twitter’s offices at the time and was escorted out.
That night, Twitter hosted a Halloween party called “Trick or Tweet” for employees and their families. Some employees wore holiday costumes and tried to keep the festive spirit. Others cried and hugged each other.
Layoffs went too far
The size of the layoffs has been in flux. Three people familiar with the matter said Twitter managers were initially told to lay off 25 percent of their staff. But Tesla engineers who reviewed the Twitter code suggested further cuts to the engineering team. At the same time, executives in charge of other Twitter departments were told to expand the list of layoffs.
While Twitter managers were working on the list of layoffs, Elon Musk flew to New York to meet with advertisers, who are Twitter’s moneymakers. Most of Twitter’s revenue comes from advertisers. Brands such as Volkswagen Group, General Motors and United Airlines have all said they will suspend advertising on Twitter while they assess the impact of Elon Musk’s entry.
In meetings with some advertisers, Elon Musk proposed a system that would let Twitter users choose the type of content the service delivers to them, meaning brands could better target ads on the platform, people familiar with the matter said. He also promised to improve the product and offer more personalization for users and ads.
But his efforts have been hampered by the departure of two New York-based Twitter executives: Buran, Twitter’s chief marketing officer, and JP Maheu, vice president for advertising. They are both well-known in the advertising world.
Lou Paskalis, a veteran advertising executive, said the Twitter executives “have a great relationship with the top of the Fortune 500 and they are very transparent and inclusive. Those things can generate a lot of trusts. But now, they’ve been called into question.
By Saturday, Elon Musk’s advisers realized that the cuts might be too big, four people familiar with the matter said. As a result, some asked the fired engineers, designers and product managers to return to their former jobs.
Unable to operate normally
At Goldberg, Twitter’s revenue arm, the company had to recall executives responsible for key money-making products that “no one else knew how to operate,” people familiar with the matter said. One manager agreed to try to rehire some of the fired employees but said he was concerned that they were “weak, lazy, unmotivated and maybe even opposed to an Elon-led Twitter.
On Monday, some Twitter employees came to work and discovered that some of the systems they relied on weren’t working. In San Francisco, an engineer found that some of the company’s contracts with vendors that provide user data management software were on hold or expired and that managers and executives who could fix the problem had been fired or resigned.
By Wednesday, staff at Twitter’s New York office couldn’t even use WiFi anymore because the network was dropping due to overheating in the server room.