Twitter Lay-Offs: Elon Musk Fires Nearly Half Of All Twitter Employees, Admits Revenue Shortfall

Around half of Twitter's 7,500 employees across the world have been laid off by new owner Elon Musk. Twitter's poor financial state has been cited as the reason behind mass firings.

Elon Musk

Twitter has fired almost half of its worldwide workforce within days of its takeover by tech billionaire Elon Musk, as per reports. 

Twitter earlier sent an unsigned email to all employees that said they would be notified whether they are retained or let go by Friday evening.  

Musk has argued that lay-offs are essential to be keep Twitter financially viable. When he took over Twitter, he also fired the leadership of Twitter, including Chief Executive Officer Parag Agrawal, Chief Financial Officer Ned Segal, and policy head Vijaya Gadde. He also disbanded the board of directors of Twitter and he currently serves as the only director on board. 

Massive lay-offs have also raised doubts over Twitter's ability to moderate content on its platform and to run the platform effectively.

Earlier, it was reported that Musk plans to fire up to 75 per cent of employees but reports that such plans were not in place, noting that such massive firings would render workforce too short of what would be needed to keep the company running. 

Up 50% Twitter employees laid off

Up to 50 per cent of all Twitter employees have been laid off across several teams, according to reports. 

Since Twitter reportedly had around 7,500 employees before lay-offs, it's understood that around 3,700 staffers have been laid off.

Lay-offs have been reported in several teams, such as human rights, machine learning, public relations, algorithmic ethics, trust and safety, etc. 

The Guardian reported that curations team has been fired. The team played a key role in covering "civic integrity" events such as elections, news, sports, and was internally considered a key filter against misinformation, according to The Guardian.

Yoel Roth, Twitter’s head of safety and integrity, said in a tweet that 15 per cent of his team was laid off and 50 per cent of overall staffers were let go. He noted that content moderation personnel were least impacted with the lay-offs.

Reuters cited Twitter's filing with California's employment authority and reported that the laid off staffers include 784 San Francisco headquarters and 199 in San Jose and Los Angeles offices.

Why has Elon Musk fired Twitter staffers?

Twitter explained the idea behind such vast lay-offs in an unsigned email to employees. Screenshots of the email surfaced on the internet. 

Musk has admitted the company is running losses and it has been reported earlier that his $44 billion acquisition of Twitter overvalues it significantly. 

In the mail, Twitter said lay-offs were to "place Twitter on a healthy path" and it's "unfortunately necessary to ensure the company's success moving forward". 

Musk has said that Twitter has "pretty serious revenue and cost challenges". 

In the April-June quarter, Twitter posted a loss of $270 million and a drop of 1 per cent in revenue.

Webush analyst Dan Ives called Twitter a "troubled asset", according to Fox Business.  

"The easy part for Musk was buying Twitter, the difficult part and Everest-like uphill battle looking ahead will be fixing this troubled asset," noted Ives, according to Fox.

He further noted, "The $44 billion price tag for Twitter will go down as one of the most overpaid tech acquisitions in the history of merger and acquisition deals on the Street in our opinion. With fair value that we would peg at roughly $25 billion, Musk buying Twitter remains a major head scratcher that ultimately he could not get out of once the Delaware Courts got involved."

Musk in a tweet said that Twitter is losing over $4 million a day and there was no choice. 

Concerns over Twitter lay-offs

Musk has previously said that he is a free speech absolutist. In the wake of lay-offs at Twitter, which are expected to affect its ability to moderate content, there is fear that content moderation on the platform would take a hit and misinformation and hate speech would go unchecked.

Musk has, however, reiterated that there has been no change in content moderation policy at Twitter. 

There are also concerns that such massive lay-offs could affect everyday functioning of the platform.

"Given the sweeping nature of Musk’s layoffs and his mandate to cut costs in areas like cloud hosting, employees who remain at Twitter told The Verge that they expect the company to have a hard time maintaining critical infrastructure in the short term," reported The Verge

Legal challenge to lay-offs

Several laid off Twitter employees have initiated legal actions againtst Twitter, according to reports. 

Attorney Shannon Liss-Riordan, who filed a lawsuit, said in a statement to CNN, "Elon Musk, the richest man in the world, has made clear that he believes complying with federal labor laws is ‘trivial’.We have filed this federal complaint to ensure that Twitter be held accountable to our laws and to prevent Twitter employees from unknowingly signing away their rights."


The cases have been filed under a California law which requires that companies give at least 60 days of notice before a mass firing, reported The Verge.