"Musk Becomes Sole Director, Twitter Board Dissolved... '25% Staff Layoffs'"

Dissolution of Existing Board of 9 Members
Final Layoffs May Reach 50%

(Photo by WSJ)

[Asia Economy Reporter Yujin Cho] Elon Musk, Tesla CEO, who is pushing for layoffs after acquiring Twitter, has also dissolved the existing board of directors.

According to the Wall Street Journal (WSJ) on the 31st (local time), Twitter announced in its securities filing that it has dissolved the existing nine-member board and that CEO Musk will serve as the sole director.

When Musk announced on April 14 that he would acquire all Twitter shares and take the company private, he publicly clashed with the existing board.

The Twitter board viewed Musk's acquisition attempt as a hostile takeover and activated a poison pill to defend management rights. At that time, the board argued that Musk’s purchase of Twitter shares at $54.20 per share, while the stock price had reached up to $70 per share, was detrimental to shareholder interests, leading to conflict.

In this process, key executives who clashed with Musk, including CEO Parag Agrawal, CFO Ned Segal, and CLO Vijaya Gadde, were consecutively dismissed. It appears that Musk will take over the vacant Twitter CEO position.

In the filing submitted that day, Musk announced the completion of the $44 billion acquisition by purchasing Twitter shares at $54.20 per share, including plans related to debt repayment and delisting procedures.

Following the executive reshuffle, Musk is expected to carry out a high-intensity restructuring by laying off about 2,000 employees, approximately 25% of the total workforce.

The Washington Post (WP) reported that Alex Spiro, a lawyer who has represented Musk for years, is leading this workforce restructuring.

A Musk team official stated that employee evaluations and selection processes for the 2,000 layoffs have been underway since last weekend. WP cited another source last week saying the final layoff scale could reach up to 50%.

WP obtained documents submitted by Musk to Twitter investors and reported on the 20th that Musk plans to reduce Twitter’s workforce of about 5,500 employees after the acquisition.

However, Musk reportedly told employees during a visit to headquarters last week that there are no plans to cut three-quarters of the staff.

As the new owner of Twitter, Musk has announced various changes to service policies, including easing content moderation rules and making algorithms more transparent.

Concerns have arisen that Musk, who advocates for "freedom of expression," may come into conflict with governments such as the European Union (EU), which enforce strong content regulations.

Last week, Musk promised Thierry Breton, EU Commissioner for Internal Market, that he would comply with the EU’s Digital Services Act (DSA). EU officials also said Musk agreed to meet with Commissioner Breton within weeks.

The DSA requires digital platforms to promptly remove content related to illegal acts such as hate speech based on race, gender, or religion, terrorist content, illegal discriminatory content, and child sexual abuse material as soon as they become aware of it.

If platforms violate these regulations, they may face fines of up to 6% of their total revenue.

Immediately after completing the Twitter acquisition process on the 28th, Musk posted that the Twitter logo, the "blue bird," has been freed, which was interpreted as signaling a relaxation of freedom of expression policies.

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