The future of one of the most influential and underperforming companies in the Bay Area rests in the hands of a man some consider a genius and others a madman. For now, Twitter is in chaos, thousands of employees are suddenly sacked on Friday, and advertisers are concerned about the plans of the new owner, Elon Musk, for the social media giant.
“What will he do? Nobody knows, ”said Steve Blank, Silicon Valley tech industry guru and assistant professor in management science and engineering at Stanford University.
A leveraged buyout and Twitter privatization by Musk last month burdened the company with $ 13 billion in debt. On Friday, Twitter, which has lost money for eight of the last 10 years, began massive layoffs that multiple reports say could amount to around 3,700 jobs, or half the global workforce of a San Francisco-based company.
Musk on Friday afternoon tweeted about manpower reductionby saying “unfortunately no choice” because the company was losing more than $ 4 million a day. Twitter reported a loss of $ 3 million a day in its latest quarterly regulatory report.
Quitting jobs, coupled with Musk’s plan that users would charge users $ 8 per month for verification, and his earlier statements about allowing anyone to tweet anything, as long as it’s legal, created a deep sense of uncertainty about the platform and the future companies.
The Gulf Area Council described Friday’s layoffs as “inconvenient” in the face of widespread job cuts at regional tech companies, but called Musk’s move an “internal business decision.” Musk said the laid-off workers were offered a three-month severance pay.
Silicon Valley Leadership Group, an organization supporting policy and business advocacy, said Friday was “a tough day for so many incredibly talented people on Twitter.” But it took a neutral stance on changes to the company under Musk. “Disruptions have long been a hallmark of the Silicon Valley economy, which brings its ups and downs,” group CEO Ahmad Thomassaid.
Blank cited Musk’s success with electric car maker Tesla and rocket maker SpaceX in Southern California – both of the world’s leading companies – but also called the new Twitter CEO “the world’s most anti-social person.”
Twitter needed “re-inventing” because it was “bloated” and “unmanageable,” said Blank. “It’s not clear if it’s the right thing to re-invent, or if it’s the right person to reinvent, but it certainly has experience of seeing things that others don’t.”
Musk, the richest man in the world with a net worth of $ 190 billion According to Bloomberg is adored by legions of fans who admire his innovation and counter -arianism. He is also passionately hated by many who oppose his right-wing politics and oppose social laws and norms. His wealth and fame caught the attention of the world with the purchase of Twitter, a hugely influential platform used by hundreds of millions of people around the world, including ordinary people, celebrities, and government leaders.
If Musk is mainly driving Twitter to maximize profits and becoming a platform that is toxic to users and advertisers, it risks sending users to another social media company, Blank said. Musk’s own actions raised fears of such toxicity, and earlier tweets from his account, including an Adolf Hitler meme and a s*xist acronym, and one last weekend promoted a fabricated account by a well-known publisher of fake news about the att*ck on the husband of Nancy Pelosi, Speaker of the House of Representatives, Paweł.
In the face of multi-billion dollar debt since it was first on Twitter and the company’s loss history, Musk announced a plan to charge users $ 8 a month for verifying a “blue check” the platform was using to allegedly verify credible sources of information.
The plan has further heightened fears among advertisers who will be key sources of Twitter’s income that it will turn into a cesspool of disinformation where abusers and propaganda vendors have a free hand. In the past, verification helped users distinguish between real and false information; if it is only used for paying people then the distinction may disappear.
In a tweet Friday, Musk blamed “activist groups putting pressure on advertisers” for what he described as a “huge fall” in ad revenue. However, some companies that are concerned that their ads may be associated with offensive content to their customers pay close attention to what the new Twitter owner says and modify their advertising budgets accordingly.
REI, a clothing giant with nine stores in the Bay Area, said Friday in response to questions about Twitter advertising that it has “committed to becoming a fully inclusive, anti-racist, multicultural organization.” The company cited “the uncertain future of Twitter’s ability to moderate harmful content and guarantee advertisers brand safety” in its decision to freeze advertising spending and Twitter marketing posts, expecting “more information on the future of the platform.”
The Volkswagen Group, which owns Volkswagen and other car companies, including Porsche, Audi, Lamborghini and Bentley, said Friday that in response to Musk’s plan to relax its content rules, it “instructed its brands to halt paid activities on the platform until further notice.” VW spokesman Jens Katemann said the company is “closely monitoring the situation and (will) decide on the next steps depending on its development.”
Late Friday afternoon, after right-wing expert Mike Davis called on Musk in a tweet to “name and shame the advertisers who succumb to the advertisers boycott” so they can be subjected to “counter-boycott”, Musk he replied“The thermonuclear name and shame is exactly what will happen if this continues.”
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