Just over a week after Elon Musk closed his blockbuster $44 billion acquisition of Twitter, the social media platform appeared to be in chaos Friday as a wave of massive layoffs began and a growing number of advertisers signaled they have, or will be, suspending business with the company.
Paid advertising on the platform, which boasts around 240 million daily users, is key to Twitter’s business model and reportedly accounts for about 90% of the company’s revenues.
How many Twitter employees is Elon Musk firing?
On Friday, the San Francisco Chronicle reported half of Twitter’s 7,500 staff members lost their jobs in a wave of layoffs, advertisers on the platform “are pulling out left and right, and calls for more to pull out are growing.” All the while, the Tesla and SpaceX CEO is tweeting about his disdain for small talk, chatting with conservative activists and griping about “activist groups” without acknowledging the waste that has been laid in the past week on Twitter.
Tech news website The Verge reports the areas of Twitter most impacted by Musk’s cuts include its product trust and safety, policy, communications, tweet curation, ethical AI, data science, research, machine learning, social good, accessibility, and even certain core engineering teams, according to tweets by laid off employees and people familiar with the matter.
According to emails sent to laid off employees and an internal FAQ obtained by The Verge, those effected will continue to be paid and receive benefits until dates that appear to match the length of the mass layoff notice required by U.S. federal and state law. If they sign a “Release of All Claims” document and separation agreement, all U.S. employees will then receive one month of base pay as severance that is taxed at the higher supplemental income rate.
Twitter advertisers are banding together and bailing out
A coalition of groups and individuals known as “Stop Toxic Twitter,” which includes the Anti-Defamation League, Color Of Change and the NAACP, is calling on advertisers to pull out — but even before this, L’Oreal, Oreo maker Mondelez and Audi already temporarily pulled ad spend on Twitter, according to The San Francisco Chronicle.
Musk’s sentiments mirror the poll he tweeted out a few days ago, in which he suggests that advertisers are supporting “political ‘correctness’” in pulling out of the platform. On Friday, Musk tweeted that the advertiser exodus is being driven by “activist” groups who Musk also accused of “trying to destroy free speech”.
On Thursday, The Wall Street Journal reported General Mills Inc. and Pfizer are also among a growing list of brands that have temporarily paused their Twitter advertising in the wake of the takeover of the company by Musk, according to people familiar with the matter.
An executive at one major ad agency said about 20 of its clients had temporarily paused Twitter spending, according to the Journal. Ad buyers say that the platform isn’t considered a must-buy for many advertisers, with far larger budgets going to tech giants such as Alphabet Inc.’s Google and Meta Platforms Inc., and that pausing makes sense during the bumpy transition under Musk.
Some fired Twitter employees file lawsuit against Musk
Late Thursday, five plaintiffs filed a lawsuit in San Francisco federal court claiming Twitter locked employees out of their accounts on Thursday, signaling that they will soon lose their jobs, according to Reuters. One of the five named plaintiffs, who is based in California, says he was terminated on Nov. 1 without notice or severance pay.
The suit alleges that Musk is in violation of the federal Worker Adjustment and Retraining Notification Act which requires businesses with 100 or more employees to provide 60 days’ notice before engaging in mass layoffs.
On Friday, Shannon Liss-Riordan, a lawyer for the plaintiffs, said that it appeared Twitter was making an effort to comply with the act by offering to pay some employees through Jan. 4, per Reuters. She said employees were told they would be presented with severance agreements next week requiring them to waive their ability to sue Twitter in exchange for a payout.