As he defended his drastic cost-cutting initiatives at Twitter, billionaire owner Elon Musk claimed the company is on pace to achieve “basically cash flow break-even” next year. Before the expense reduction, Musk claimed Wednesday in a Twitter Spaces audio conversation, Twitter was headed toward a “negative cash flow position of $3 billion per year.”
Since seizing control of Twitter on October 27th, Musk has fired half of the company’s workforce and has insisted that the surviving workers adopt a “hardcore” work ethic and schedule. Advertisers, who make up 90% of Twitter’s income, have been shaken by the recent events. “We have an emergency fire drill on our hands,” Musk said. “That’s the reason for my actions.”
Approximately 2,000 people work for Twitter at the moment, CEO Elon Musk revealed on Wednesday. According to Musk, Twitter had planned to invest $5 billion in 2019. Twitter expected a net cash loss of $6.5 billion next year on $3 billion in sales owing to its $12.5 billion in debt from the purchase. Musk said that this resulted in a negative cash flow of $3 billion, with Twitter holding $1 billion in cash.
In 2021, Twitter made $5 billion in yearly revenue, and the firm predicted in February that this number would increase by low- to mid-20% in the following year. Musk’s “number one priority,” as he put it during the Spaces session, is to increase subscription income to the point where it significantly contributes to Twitter’s bottom line. Because of the bad economy, several businesses have reduced their advertising spending.
Musk, who is also the CEO of Tesla Inc (TSLA.O), said that the company’s largest marketers informed him that Twitter advertisements have the lowest ROI of any social media network.
Elon Musk, Twitter’s billionaire owner, justified his company’s aggressive cost-cutting tactics by saying it is on track to reach “essentially cash flow break-even” next year. Musk said in an audio chat posted to Twitter Spaces on Wednesday that the company was going for a “negative cash flow situation of $3 billion per year” until it cut costs.
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