Could Twitter collapse or go bankrupt?

Spread the love

Elon Musk’s reaction on Friday to the latest wave of Twitter mayhem was to tweet an image of the company’s logo superimposed on a tombstone. Former Twitter staff are wondering if the problems at the company are really existential.

pic.twitter.com/rbwbsLA1ZG

— Elon Musk (@elonmusk) November 18, 2022

\n”,”url”:”https://twitter.com/elonmusk/status/1593459801966538755″,”id”:”1593459801966538755″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”: false,”source”:”Twitter”,”elementId”:”a0e4cfee-d56c-4641-b393-2984ad34f0be”}}”/>

Since Tesla’s chief executive took office last month, the company has been plagued by steep job cuts, an advertising boycott, bankruptcy warnings and now a mass resignation among its remaining staff.

Not surprisingly, the hot topics on Twitter this morning included #RIPTwitter and #TwitterMigration as the turmoil worsened.

Here we answer some questions about the magnitude of the crisis.

How many employees have left Twitter?

Musk laid off about half of the 7,500 employees in the first week of November, within days of taking office. This left some 3,750 workers. Overnight, an unspecified number of those employees left after Musk gave them a 5 p.m. According to one report, 75% opted for severance, which would leave fewer than 1,000 employees at Twitter.

What I hear from Twitter employees; It appears that roughly 75% of Twitter’s remaining 3,700 employees have not chosen to stick around after the “unconditional” email.

Even though the deadline has passed, everyone still has access to their systems.

—Kylie Robison (@kyliebytes) November 17, 2022

\n”,”url”:”https://twitter.com/kyliebytes/status/1593391167718113280″,”id”:”1593391167718113280″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”: false,”source”:”Twitter”,”elementId”:”40f52a30-d20e-4218-9d99-1cf8a00e4deb”}}”>

What I hear from Twitter employees; It appears that roughly 75% of Twitter’s remaining 3,700 employees have not chosen to stick around after the “unconditional” email.

Even though the deadline has passed, everyone still has access to their systems.

—Kylie Robison (@kyliebytes) November 17, 2022

The departures have affected a range of departments, including the press team, meaning inquiries about the scale of the cuts and the impact on the platform now go unanswered. Instead, former employees are filling the void.

I just woke up to the news that more Tweeps were summarily fired last night. At this rate, no one will be left to run Twitter.

—Eric Frohnhoefer @ 🏡 (@EricFrohnhoefer) November 15, 2022

\n”,”url”:”https://twitter.com/EricFrohnhoefer/status/1592528714126233600″,”id”:”1592528714126233600″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”: false,”source”:”Twitter”,”elementId”:”136b65d4-5fed-416b-a9a5-937e8bd6a22c”}}”>

I just woke up to the news that more Tweeps were summarily fired last night. At this rate, no one will be left to run Twitter.

—Eric Frohnhoefer @ 🏡 (@EricFrohnhoefer) November 15, 2022

Could Twitter collapse?

Evidence on social media pointed to several engineers leaving after Musk’s ultimatum, despite Twitter’s new owner stressing that the new company would be “much more engineering-driven” under his ownership and that “those who write great code will make up the majority of our team.”

Now there are concerns that the site is vulnerable to glitches and bugs, amid signs that the complex system that underpins Twitter is already up and running. Two-factor authentication has already been affected and there have been issues with retweets.

Steven Murdoch, a professor of security engineering at University College London, said the platform could struggle to handle “complex failures”, perform manual maintenance or address security threats. Simply replacing deceased engineers will be difficult. “Twitter could try to hire new staff or reassign existing staff, but getting up to speed on how the relevant systems work can take months, even with a smooth handover process. Every large website has developed their own unique system and anyone coming from outside will have a steep learning curve.”

Even before Musk arrived, there were signs of trouble. Former Twitter security chief Peiter Zatko warned that information security standards were lacking. He feared that Twitter could suffer an “Equifax-level” attack, referring to the 2017 attack on a credit reporting company that exposed the data of 147 million people in the US.

Could Twitter go bankrupt?

Musk warned this month that the company could go bankrupt, saying that without an increase in subscription revenue, it may not survive the next downturn. Advertising accounts for 90% of Twitter’s $5.1 billion in annual revenue, but that revenue stream has been hit hard by a lull in spending from major clients, including General Motors and the company behind Twitter brands. Cheerios cereal and Lucky Charms. Musk confirmed that there was a “massive drop” in advertising revenue in the wake of the acquisition.

Financial woes (Twitter has been at a loss for 10 of the past 12 years) have been compounded by a muddled relaunch of the subscription service, Twitter Blue, which was halted after impersonators accepted the offer to be “verified” simply by paying $7.99 per month.

What if the advertisers don’t come back?

That would be very serious for Twitter. The company has added nearly $13 billion of debt to its balance sheet after the acquisition and has interest costs of about $1 billion a year. One measure of a company’s ability to pay those costs is its cash flow. According to Twitter’s latest set of quarterly results as a publicly traded company, Twitter generated negative free cash flow (spending more cash to run the business than it takes in) of nearly $124 million.

Farhad Divecha, managing director of UK digital marketing agency Accuracast, said fears about “brand safety” on Twitter were already a concern among advertisers. Now they will be concerned about the quality of service they will receive from Twitter staff, he added.

“Staff disenfranchisement obviously seems like a problem. And even if Elon didn’t want to negatively impact ad services, as an agency that manages advertiser budgets, we are concerned about the quality of service we receive from Twitter ad support and the Twitter account managers that service our agency’s account. and that of our clients. accounts,” she said.


#Twitter #collapse #bankrupt

Leave a Comment

Your email address will not be published. Required fields are marked *