Elon Musk no longer rules out bankruptcy on Twitter

Tech billionaire Elon Musk has not ruled out bankruptcy of the online service a few weeks after the $44 billion Twitter takeover.

According to media reports, he warned during a public appearance for employees on Thursday that Twitter’s balance sheet could face a $1 billion hole in the coming year. If it is not possible under these circumstances to bring in more money than we spend, “bankruptcy cannot be ruled out,” Musk quoted financial service Bloomberg, as well as the tech media “The Information” and “Platformer.”

Twitter was already in the red before the takeover. After the deal, Musk complained about a drop in sales as some major advertisers placed ads on the platform. They worry that if Musk relaxes the content rules, as announced, their ads could appear alongside inappropriate tweets.

Billions of debt due to takeover

Also on Twitter, the loan of about 13 billion dollars that Musk took out for the purchase. According to media reports, paying off this debt costs about $1 billion a year. The tech billionaire wants to supplement the advertising revenues, which have so far accounted for 90 percent of sales, with a subscription company. The launch of its new subscription with a checkmark initially caused chaos as some users impersonated celebrities and companies with deceptively real-looking fake accounts.

Musk had previously warned employees about difficult times in an email. The economic situation is “bad”, especially for a company that depends on advertising revenue. In the memo, Musk also announced new guidelines for working from home — going forward, working from home will only be allowed with his express personal consent.

Employees at least 40 hours a week in the office

According to the memo, which the US media unanimously quoted, employees must be in the office at least 40 hours a week. Before the takeover, Twitter employees were allowed to work anywhere. Musk is seen as an outspoken opponent of the home office trend, which he had already made clear at his electric car company Tesla.

Last week, Musk cut about every second of the roughly 7,500 jobs on Twitter. According to reports, he now said that in some cases the company still had too many employees.

According to media reports, two other top executives left the company on Thursday: Yoel Roth, who was responsible for filtering out objectionable content, and Robin Wheeler, who was recently in charge of relations with advertisers. (sda/dpa)