"Like Trump"... Musk Begins Full-Scale Twitter Layoffs (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy Reporters Yujin Jo and Hyunjin Jung] Elon Musk, CEO of Tesla, is set to begin significant staff reductions at the social networking service (SNS) Twitter, which he acquired. It appears that he will initiate a high-intensity restructuring plan to cut the workforce by half, eliminate employee leave policies, and abolish remote work. This is interpreted as a strategy to focus on cost reduction through organizational restructuring and improving the company’s operational efficiency.

◆ Musk Eliminates Leave Days and Remote Work

According to Bloomberg and other sources, Twitter informed employees via email on the 3rd (local time) that they would be notified by 9 a.m. on the 4th whether they were subject to layoffs. The company pre-announced, "As part of efforts to put Twitter on a healthy path, we will undergo the difficult process of reducing our global workforce."

During the layoff process, Twitter decided to temporarily close offices and suspend employees’ access to office premises to protect Twitter’s systems and customer data and ensure employee safety. Foreign media reported that some employees’ access to email and Slack, the messaging platform, was already blocked starting that day, indicating that the process had begun.

Earlier, foreign media reported that Musk plans to reduce Twitter’s total workforce (7,500 employees as of the end of last year) by about 3,700, roughly half. Following the acquisition, Musk dismissed key executives including CEO Parag Agrawal and conducted further cuts among vice presidents and directors over the past weekend. This week, team leaders were given a target to reduce their teams by 50%.

[Image source=AP Yonhap News]

Along with the layoffs, Musk reportedly decided to abolish the monthly leave system that Twitter introduced during the COVID-19 pandemic, according to foreign media. A source familiar with the matter said, "Musk deleted leave days from Twitter employees’ calendars." Additionally, Bloomberg reported that Twitter’s remote work policy was canceled, and employees not subject to layoffs are expected to return to the office for full-time work.

Bloomberg described this as "another sign that Musk cannot tolerate Twitter’s existing work culture." Compared to Tesla, which has demonstrated a disciplined management style under Musk’s leadership, Twitter’s decentralized management culture, which emerged after the founder stepped away from day-to-day operations, is seen as alien to Musk.

◆ Atmosphere Inside Twitter is 'Harsh'... Musk Demands "Cut Costs"

Before the company sent emails to employees, rumors of imminent layoffs circulated within Twitter, and the Washington Post (WP) reported that the atmosphere was unsettled after it was revealed that Musk made his official schedule on Google Calendar publicly accessible to all employees.

At 3 p.m. the previous day, an event titled "RIF Review" (Reduction in Force Review) appeared on Musk’s Google Calendar. On Slack, Twitter’s internal messaging platform, a channel was created to calculate severance pay for departing employees. WP reported that this fueled fears that the mass layoffs cutting half the workforce would be executed on the 4th, deepening employees’ concerns.

WP assessed, "Musk’s management style, reminiscent of former U.S. President Donald Trump, is causing employees awaiting layoffs to tremble." One employee said, "Twitter’s internal culture has completely changed overnight. The remaining employees are suffering from layoff trauma."

[Image source=AP Yonhap News]

Earlier, Musk attempted to diversify Twitter’s revenue structure, which relied solely on advertising, by raising the subscription fee for the existing paid service ‘Twitter Blue’ from $4.99 to $8. If the $8 monthly paid service is successfully established, Twitter could generate an additional $4.1 million in annual revenue.

Currently, Twitter’s main revenue source is advertising from corporate accounts. Twitter generated $5.1 billion in revenue last year, with about 89% coming from advertising services. Although Twitter’s corporate value was estimated at $44 billion, it has no significant revenue models beyond advertising. The New York Times (NYT) reported that discussions are underway to add revenue streams such as paid direct messaging (DM) services to reduce advertising dependency.

Musk reportedly instructed the company to cut up to $1 billion annually in infrastructure costs alongside the layoffs. Accordingly, the company launched the ‘Deep Cuts Plan,’ aiming to save $1 million to $3 million daily in server and cloud expenses.

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