In the ongoing defense of his budget cuts and wholesale company restructuring, Twitter owner and CEO Elon Musk has claimed that the social media platform is set to lose $3 billion in the upcoming financial year. Twitter has been plagued by scandal ever since Elon Musk bought it.
Musk’s tenure as CEO has been the subject of extensive online discussion due to widespread layoffs and unpopular policy changes. He has been publicly voted out as CEO, but he has not stopped defending and explaining his recent organizational shifts.
In a recent Twitter Spaces call, he detailed the company’s dire financial situation, saying that it would likely collapse if drastic changes weren’t made. Musk said in a call with Spaces investors, which was tweeted by @TheSonofWalkley, that the company stands to lose $3 billion this year due to the rising cost of debt servicing brought on by rising interest rates.
His extreme measures to reduce expenses are a response to his enormous financial concerns. “Because of the nature of this transaction,” he explained, “where there’s $12.5 billion of debt and the debt rate has been going crazy… So that’s like a negative cash flow situation of like $3 billion a year. That’s not good, [especially] since Twitter has $1 billion in cash. So that’s why I’ve spent the last five weeks cutting costs like crazy.”
He went on to say that the team was working on ways to boost Twitter’s earnings, such as through subscription upgrades and changes for advertisers. Consequently, he thinks the service will make out “okay” financially.
“I now think that Twitter will in fact be okay next year,” he stated. “I think we will be sort of roughly cash flow break even. That’s what I hope for next year… as opposed to minus $3 billion ish… [My actions] may seem sometimes spurious or odd. It’s because we have an emergency fire drill on our hands, not because I’m naturally capricious.” Despite Musk’s adamant defense of his policy, discussion over the platform’s direction is sure to drag on.
Elon Musk, Twitter’s CEO, has stated that the social media network would lose $3 billion in the next financial year as he continues to defend his budget cutbacks and fundamentally restructure of the firm. Ever since Elon Musk acquired Twitter, the company has been mired in controversy.
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