To convince the banks to follow him in his takeover of Twitter, Elon Musk would have promised of slash salaries for Twitter executives, as well as members of the Board of Directors. He also clarified that he plans to develop new features to monetize tweets and improve the company’s profitability.
Salary cuts to be expected in the coming months at Twitter?
To improve the profitability of Twitter, Elon Musk already has some ideas. According to several sources, the billionaire would have given a speech to the banks suggesting that he could reduce the salaries of company executives to lower expenses. Musk eventually secured $13 billion in Twitter-backed loans and a $12.5 billion loan tied to his Tesla stock. He agreed to pay the rest (about $18.5 billion) with his own funds.
To afford Twitter Elon Musk sells Tesla shares for $ 8.5 billion
That talk sounded more like a vision rather than a firm commitment, the sources say, and the exact cost reductions he expects to achieve once he owns Twitter remain unclear. The plan he presented to the banks was fairly sketchy. He simply explained that in eliminating the remuneration of the members of the board of directors, it could save $3 million a year. Elon Musk would also have mentioned future job cuts, always with a view to profitability.
However, some sources assure that he would have proceeded to the acquisition without having access to confidential details on the company’s financial and workforce performance. Are these fine words to reassure the banks? It is a possibility. In any case, Musk would have already found a new general manager for Twitter, but did not wish to reveal his identity. He had previously told Twitter Chairman Bret Taylor that he had no confidence in the company’s management.
Elon Musk wants to monetize tweets
In his speech to the banks, Elon Musk also highlighted Twitter’s low gross margin. This is the reality: it is much weaker than that of its competitors, Facebook, Pinterest, Instagram or even TikTok. According to him, there are many possibilities “to run the business more profitably”. It includes in particular offer new features to monetize tweets.
Indeed, he told banks that he plans to develop revenue-enhancing features for the business, including new ways to profit from tweets that “contains important information or goes viral”. Among the ideas raised is the charging fees when a third-party site wishes to quote or embed a tweet certified persons or organizations.
Some banks have refused to lend to Elon Musk, fearing that his unpredictability could lead to an exodus of talent from Twitter, which would hurt his business.