Twitter layoffs begin as Elon Musk seeks to stabilize wobbly tech company
Twitter employees braced for massive job cuts on Friday following Elon Musk’s purchase of the social media platform, which is battling to generate a more robust revenue stream as it tries to diminish a lake of red ink.
The job cuts began earlier this week on Twitter, affecting a few employees, according to a federal class action lawsuit filed Nov. 3 on behalf of workers at the company.
Twitter’s layoffs could cut a quarter or even half of the social network’s workforce. This could involve laying off potentially 3,700 workers.
San Francisco-based Twitter temporarily closed its offices while the layoff process was underway via email notifications to employees. The headquarters building was quiet, according to an on-site observation by this news agency on Friday.
However, it was unclear whether Musk-led Twitter was following California labor regulations that require employers to notify their workers in advance of widespread job cuts.
As of Friday morning, the state’s Employment Development Department had not received any WARN notifications from Twitter about layoffs at the company, an EDD spokesperson told this news agency.
Employers are required to give 60 days’ notice to employees, as well as state and local authorities, of mass layoffs or plant closures.
The heartbreaking layoffs at Twitter had been anticipated for weeks after it became clear that Musk, the world’s richest person and CEO of electric vehicle maker Tesla, would become Twitter boss.
On Oct. 27, Musk completed a $44 billion acquisition of Twitter through a deal that also deprived the technology company.
Musk faces an uphill battle in his quest to reverse Twitter’s financial woes and bring the company to profitability.
In the 12 months ending June 30, Twitter lost $111.9 million on revenue of $5.23 billion. In 2021, Twitter lost $221.4 million on revenue of $5.08 billion.
“Twitter started the layoffs with a few employees,” the class action lawsuit in the U.S. District Court asserted. “For example, on November 1, 2022, Twitter terminated plaintiff Emmanuel Cornet without prior written warning.
The class-action lawsuit also sketched the potential layoffs of other Twitter workers in stark fashion.
“On November 3, 2022, plaintiffs Justine De Caires, Jessica Pan and Grae Kindel were banned from their Twitter accounts, which they understood to report that they were terminated,” the lawsuit states.
Three of the Twitter employees named as plaintiffs in the lawsuit work at Twitter’s offices in San Francisco. One works at a Twitter office in the Boston area, according to the complaint.
“The plaintiffs are very concerned that Twitter will pursue these terminations without providing the required notice,” the litigation said.
Provisions in California’s WARN labor laws could allow Twitter to circumvent the 60-day notice provision and abruptly fire workers. However, workers should still be paid for the 60 days, according to labor law experts.
“Employers can pay severance pay to employees,” Robin McKenzie, a partner at Los Angeles law firm Baker McKenzie, said in a post on a human resources website. “This includes all forms of compensation, including benefits.”
Amid the devastation of layoffs and the prospect of scrutiny by state labor regulators, Twitter executives still face the challenge of the company’s financial weakness.
“Obviously Twitter management was already looking for ways to generate more revenue,” said Tim Bajarin, principal analyst at Creative Strategies, a Campbell-based market researcher. “Musk and his team realize the current business model isn’t working.”
Musk, who describes himself as a “Twitter Complaint Hotline Operator” on his verified Twitter account, tweeted regularly Thursday and Friday, with a four-hour break early Friday morning.
One of Musk’s decisions that has sparked controversy is the tycoon’s decision to charge $8 a month to any account that wants to show a blue “verified” checkmark.
Some posters complained that Musk was using the $8 fee to stifle free speech. Other posters on Twitter responded that using the Twitter platform remains free and that the charges only apply to accounts that wish to view the blue ticks.
The $8 fee has also been a point of contention between Rep. Alexandria Ocasio-Cortez (D-New York) and Musk, who have engaged in a war of words on several occasions this week.
“Lmao at a billionaire’s seriously trying to sell people the idea that ‘free speech’ is actually an $8/month subscription plan,” Rep. Ocasio-Cortez posted on her Twitter account on 2 november.
“Your feedback is appreciated pay $8 now,” Musk replied the same day.
In a recent tweet on Friday morning, Musk complained that advertising on Twitter had recently dropped.
Musk blamed unspecified activists for the revenue slump.
“Twitter has seen a massive drop in revenue, due to activist groups pressuring advertisers, although nothing has changed with content moderation and we’ve done everything we can to appease the activists” , Musk tweeted Friday morning. “Extremely messed up! They are trying to destroy free speech in America.
Some former Twitter employees have taken to social media posts to let people know they were fired and how it happened. Simon Balmain, an individual based in England, said he was made redundant from his position as senior community manager.
“Well, I guess I’m part of the dismissal,” Balmain posted on his LinkedIn account. “I was just remotely logged out of my company laptop and deleted from Twitter Slack.”
Balmain said he started working for Twitter in November 2021 after his former company, England-based Sphere, was acquired by Twitter last year.
“#OneTeam forever,” Balmain posted on his Twitter account. “I loved you all so much. So sad it had to end this way.
Aldo Toledo, a writer for the Bay Area Newsgroup, contributed to this report