Elon Musk: "I Will Cut Salaries of Twitter Executives and Board Members"

Disclosed Acquisition Plan While Taking a Loan from Bank
More Inefficient Than Facebook and Pinterest... High Potential for Cost Reduction

Elon Musk Tesla Chief Executive Officer (CEO) [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Elon Musk, CEO of Tesla, reportedly set a policy to reduce the salaries of executives and board members and to establish new revenue streams after acquiring the social networking service (SNS) Twitter.

On the 29th (local time), the U.S. financial media CNBC cited three anonymous sources saying that CEO Musk conveyed this to the banks that agreed to support the funding for the Twitter acquisition.

According to the sources, CEO Musk explained his plan to the banks for the acquisition loan, stating that salaries for Twitter executives and board members could be cut to reduce costs. He also mentioned developing new ways to monetize tweets containing important information or those widely circulated among people. This would involve charging fees when such tweets are quoted or used externally.

The reason CEO Musk revealed this was that he needed to convince the banks that sufficient cash flow could be generated to repay the loan interest. Ultimately, Musk secured approximately $13 billion (about 16.4 trillion KRW) in loans using Twitter as collateral. Additionally, he obtained loans worth $12.5 billion by pledging his Tesla shares as collateral. Of the total acquisition price of $44 billion, the remaining $18.5 billion was to be paid in cash by himself.

One source stated that the acquisition plan presented by CEO Musk at the time did not include detailed information, and the scale of the cost reductions was also unclear. The source said Musk pointed out that Twitter’s gross profit was significantly lower than that of industry peers such as Facebook and Pinterest, arguing that there was much room for more efficient operation.

Bloomberg reported that CEO Musk also mentioned layoffs of employees to the banks at that time. Furthermore, he said that content monitoring would be conducted as freely as possible within the legal constraints of each country where Twitter operates.

This content was produced with the assistance of AI translation services.