Elon Musk Tells Twitter Employees, “Bankruptcy Is Not Out Of The Question”
deadline.comAfter recently laying off half of Twitter’s employees and on the same day that three of the company’s top security executives quit, the world’s wealthiest man reportedly told Twitter’s remaining product team members that the company he just bought could see “net negative cash flow of several billion dollars” in 2023 and “bankruptcy is not out of the question” if that happens. “We can’t scale to a billion users and take massive losses along the way, that’s not feasible,” Elon Musk said at a product team all hands today according to multiple reports.
However, he continued, “if you have a compelling product, people will buy it. That has been my experience at SpaceX and Tesla.” While comparing Twitter — a media technology platform — to auto manufacturing or creating spacecraft for government and large corporate projects is not exactly apples to apples, Musk specified that his idea of “compelling” for the social media company includes adding video content and bolstering compensation for content creators.
Musk also stated plainly that the company needs to “bring in more cash than we spend.” His $44 billion purchase of Twitter last month included $13 billion in debt which will reportedly incur interest payments of over $1 billion in the next year.
According to Reuters, those payments “exceed Twitter’s most recently disclosed cash flow, which amounted to $1.1 billion” as of June.
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