U.S. social giant Twitter’s year-end bonuses may be “cut in half”. On Aug. 19, local time, the New York Times reported that Twitter has warned employees that their year-end bonuses may be cut in half due to the uncertainty caused by the economic downturn. Twitter employees’ year-end bonuses are half based on company performance and half linked to individual performance. The company’s performance in the latest fiscal quarter was disappointing, judging from Twitter’s performance.
Twitter’s second-quarter results, released in July, showed revenue of $1.17 billion for the period, missing market expectations and down 1 percent year-over-year, the first year-over-year decline since the second quarter of 2020; and a net loss of $270 million, or 35 cents per share.
In its earnings report, Twitter said the macroeconomic environment, advertising industry headwinds, plus the Musk acquisition brought great uncertainty, resulting in less-than-impressive results in the second quarter.
Two Twitter employees said they received an email from Ned Segal, the company’s chief financial officer, saying that the bonus pool is currently budgeted at half of what was previously expected in January due to the company’s poor performance.
In other words, even if Twitter meets its financial targets, employees may only get 50 percent of their bonuses.
The New York Times said a Twitter spokesman confirmed the information in the email, but declined to comment further.
Over the past few months, Twitter has made a series of adjustments in response to the worsening economic environment.
In May, Twitter announced that it was suspending most hiring and that only positions in key businesses would continue to be filled. The company also cut spending on contractor spend, marketing and real estate.
That same month, Twitter underwent major personnel changes. Ilya Brown, former vice president of product management, Katrina Lane, former vice president of services, and Max Schmeiser, former head of data science, left the company. Prior to that, Kayvon Beykpour, former head of consumer, and Bruce Falck, former head of revenue products, also left the company.
In July, Twitter laid off a third of its talent acquisition team. According to the Wall Street Journal, Twitter said the move was due to respond to increasing pressure on the business and uncertainty brought on by the Musk acquisition.
The social media company, which is anchored by its advertising business, is one of the tech companies most affected by the recession, and Twitter’s rival social media company Snap is not having a good time either. Snap’s second-quarter results came in below market expectations, ushering in its weakest fiscal quarter sales growth since going public, and the company said it would significantly slow the pace of hiring.
In addition, the Wall Street Journal reported on Aug. 18 that Snap had decided to cancel development of its selfie drone Pixy, which was launched less than four months ago. Its CEO, Evan Spiegel, told employees that the company needed to suspend development of the project in order to redeploy resources and adjust product plans in order to weather the economic downturn.
As The New York Times previously reported, most of Twitter’s 7,500-plus employees are concerned about Musk’s takeover plans, while some are looking forward to working for the unusually active social media boss, and are even disappointed that Musk wants to abandon his acquisition of Twitter. In response, Twitter CEO Parag Agrawal said employees should focus on their jobs and pay less attention to acquisition-related information.
Twitter and Musk are currently battling around the acquisition case, which is expected to be heard in Delaware Court of Equity for five days on Oct. 17 local time.
By the close of U.S. trading on Aug. 19, Twitter was up 0.27 percent at $43.99 per share, well below Musk’s offer of $54.20 per share.
