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Report: Elon Musk plans to cut Twitter’s workforce by 75%

Elon Musk plans to cut most of Twitter’s workforce if he becomes the owner of the social media company, according to a Thursday report in The Washington Post.

Musk has told potential investors in his Twitter purchase that he plans to cut roughly 75% of Twitter’s employee base of 7,500 employees, according to reports, leaving the company with a skeleton crew. The newspaper cited documents and unnamed sources familiar with the deliberations.

San Francisco-based Twitter and a representative for Musk attorney Alex Spiro did not immediately respond to messages seeking comment.

While job cuts have been expected regardless of sales, the magnitude of Musk’s planned cuts is far more extreme than Twitter’s plan. Musk himself has pointed to the need to lay off some of the company’s employees in the past, but he didn’t give a specific number — at least not publicly. Musk said the report was “clearly paying more for Twitter right now.”

Wedbush analyst Dan Ives said, “A 75% headcount cut, at least out of the gates, would indicate strong free cash flow and profitability, which would be attractive to investors looking to enter the deal.” “That said, you can’t cut the growth path.”

Ives said such a drastic reduction in Twitter’s workforce is likely to set the company several years behind.

Musk: “Long Term Potential”

19 on Tesla’s earnings conference call, Musk said he sees long-term value in Twitter, but added that he believes he and other investors are paying too much for the business.

It’s possible that the deal may require Musk to sell more Tesla shares, Ives noted in his research note. Ives said the CEO may need to sell $10 billion worth of shares to secure funding.

“As we’ve discussed, the Twitter price tag of $44 billion is just a train wreck for a property that we reasonably value in the best case of $30 billion in the midst of tough development challenges like Everest,” Ives said. .

Already, experts, nonprofits and even Twitter’s own employees have warned that withdrawing investments on content moderation and data protection could harm Twitter and its users. With Musk’s plan heavily flawed, the platform could quickly become overrun with harmful content and spam – which the Tesla CEO himself has said he will address if he becomes the owner of the company.

After his initial $44 billion bid in April to buy Twitter, Musk withdrew from the deal, arguing that Twitter misrepresented the number of fake “spam bot” accounts on its platform. Twitter sued, and a Delaware judge gave both parties until October 28 to prepare details. Otherwise the trial will be held in November.

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