Musk Plans to Lay Off 75% of Twitter Employees After Acquisition

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunjin Jung] Elon Musk, CEO of Tesla, is reported to plan laying off 75% of Twitter employees after acquiring the social networking service (SNS).

On the 20th (local time), The Washington Post (WP) reported, citing documents obtained independently and interviews, that Musk told investors he plans to reduce Twitter's workforce from about 7,500 employees to around 2,000, cutting approximately 75% after the acquisition.

WP predicted that even if Musk's acquisition of Twitter does not go through, large-scale layoffs are expected. Twitter plans to reduce its total payroll by $800 million (about 1.1 trillion KRW) by the end of next year, which would require cutting about a quarter of its staff. Twitter also plans to reduce infrastructure-related costs such as data centers necessary to maintain a site used by more than 200 million users daily.

WP stated that Twitter's current situation explains why management tried to sell the company to Musk despite the hostile takeover. If the sale does not happen, they would have to carry out mass layoffs and cost cuts themselves, so they see Musk's acquisition as a way to step away.

Twitter management has repeatedly mentioned in town hall meetings with employees that there are no immediate plans for layoffs. However, Musk responded to a question about possible layoffs in June by saying there is no need to keep low-performing employees employed.

However, concerns have been raised that such large-scale reductions could negatively affect Twitter users. Edwin Chen, CEO of Surge AI and a data scientist who handled spam-related tasks at Twitter, acknowledged that Twitter currently has excess staff but said Musk's planned layoffs are unimaginable and that users could be exposed to hacking, child pornography, and other harmful content as a result.

Twitter and Musk must finalize the acquisition contract by the 28th. Although Musk initially reversed his acquisition plan after announcing it, sources told WP that the acquisition process is currently proceeding smoothly. If the contract is not finalized by the deadline, it will lead to legal disputes.

Dan Ives of Wedbush Securities said, "It may be easy for Musk to acquire Twitter, but fixing it will be difficult." Corporate management expert Nell Minow said Musk may have told investors ambitious plans, but executing them will not be easy, adding, "Musk can make layoffs, but how will he fill those gaps? Will artificial intelligence (AI) be able to do it?"

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