Editor's PickInvesting

Elon Musk ‘planning to fire’ 75% of Twitter workers as $44 billion takeover edges closer

2 Mins read

Elon Musk is considering cutting Twitter’s workforce by almost 75 per cent, as the deadline for his $44 billion takeover of the social media group edges closer.

The world’s richest man has proposed drastic cuts to the San Francisco-based company’s 7,500 workforce, reducing it to just over 2,000, during conversations with prospective investors, The Washington Post newspaper reported last night.

The plans surfaced just one week before Musk has been required to complete the acquisition if he is to avoid a high-profile trial over his efforts to terminate the deal for much of this year. The tycoon offered to buy Twitter after all earlier this month.

Even if Musk’s takeover falls through, The Washington Post said Twitter’s current management had drawn up plans for heavy job cuts in a bid to reduce the company’s payroll by about $800 million by the end of next year.

Musk and Twitter did not respond to requests for comment.

Twitter, which was founded in 2006, runs one of the world’s largest social networks. Its platform, a microblogging service, has become particularly popular with celebrities, politicians and journalists.

The extraordinary saga over its future blew out into the open in April, when it emerged that Musk, 51, had spent months quietly building the largest stake in Twitter.

The company promptly responded by inviting Musk to join its board, provided that he agreed not to boost his 9 per cent stake in the business above 15 per cent. He agreed, before changing his mind.

Musk then returned with an offer that was accepted by Twitter within a matter of days. The company declared that it was “the best path forward” for shareholders.

By May, however, as a technology stocks rout gathered pace, Musk had cooled on the deal. He formally moved to terminate it this summer. The business sued him and vowed to enforce the merger agreement. Both sides have been preparing the ground for a trial, which had been scheduled to begin in Delaware this week.

Musk backtracked at the start of this month, however, offering to buy Twitter at the original $54.20 per share price he had agreed to pay in the spring. The trial is on hold, pending the deal’s completion.

“Although myself and the other investors are obviously overpaying for Twitter right now, the long-term potential for Twitter in my view is an order of magnitude greater than its current value,” Musk said this week.

He has a personal fortune of about $209 billion, largely derived from his stakes in Tesla, the electric carmaker, and SpaceX, the space business.