Elon Musk says Twitter has had a massive drop in revenue – Deadline

UPDATE with new comments from Elon Musk. On the same day major layoffs hit Twitter, the social media company’s new owner Elon Musk told a crowd of affluent investors in New York that activist pressure on advertisers was “an attack on the first amendment”.

Musk said he and his advisers had “done our best to appease them and nothing was working”, describing it as a “major concern”. Earlier in the day, he said the company’s ad revenue had already taken a “massive” hit from the ad pullback. Even for companies not clouded by controversy, of course, the digital advertising market has been tough lately, with big names like Meta, Snap and YouTube all reporting declines.

Musk is entering the second week of his ownership of Twitter, which he paid $44 billion to acquire. A number of high-profile advertisers have decided to suspend ad buying on Twitter amid questions about content moderation and the possibility that several people banned by the former owner, including far-right figures like Alex Jones, can be released under Musk. The new owner also said he would lift the edict keeping former President Donald Trump off the platform, although more recently he indicated the move could take some time.

The words of the CEO during a surprise appearance at the Baron Investment Conference. (Watch the video above.) The event was hosted by billionaire investor Ron Baron, one of the backers of the Twitter deal and a longtime shareholder in Musk’s biggest company, Tesla. . Baron conducted the interview with Musk.

Although the conversation covered a lot of ground beyond Tesla, the two men discussed savings from layoffs, which Musk valued at $400 million a year. Although it’s “very difficult to get” a return on such a high investment, Musk said it’s “possible” that Twitter will eventually become “one of the most valuable companies in the world.”

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As Twitter employees face mass layoffs starting today, a group of them have sued new overlord Elon Musk for failing to give proper notice of termination under federal and California laws. .

The suit – read about it here – comes as the platform has seen “a massive drop in revenue, due to activist groups pressuring advertisers,” Musk said.

The lawsuit seeking class action status was filed in the Northern District of California in San Francisco by Emmanuel Cornet, Justine De Caires, Grae Kindel, Alexis Camacho and Jessica Pan “individually and on behalf of all others similarly situated.” against Twitter “for its violation and anticipated future violation” of federal law. Lisa Bloom, a prominent attorney and the daughter of crusading defense attorney Gloria Allred (and also, for a time, a team Harvey Weinstein’s defense), has been particularly active in trying to galvanize Twitter employees to take legal action. “Twitter employees have been fired! As part of the acquisition deal, Elon promised that you’ll get the same severance and benefits as laid off workers before he arrived,” she wrote in one of a series of tweets. “Speaking to many laid off Tweeps today.”

Cornet was fired on November 1 without prior written warning. Plaintiffs De Caires, Pan and Kindel were banned from their Twitter accounts on November 3, “which they understood to signal that they were fired”. The lawsuit said federal WARN law and California WARN law require 60 days written notice of mass termination. Various tweets also pointed to a similar law in New York State and the UK, with the latter requiring 90 days notice. “Plaintiffs are gravely concerned that Twitter will pursue these terminations without providing the required notice,” the lawsuit said.

In a filing with the SEC earlier this year, when the company was still publicly traded, it said it had 7,500 full-time employees as of Dec. 31, 2021.

Up to 50% of the company’s staff could be made redundant with notifications starting to arrive today.

Meanwhile, Musk took to Twitter to sound the alarm over the ad.

General Mills, Audi and others have confirmed in recent days that they have suspended advertising on Twitter following Musk’s rise. Reaching the deal last week saw an upsurge in derogatory content and cast doubt on future moderation policies under new ownership. Musk said he would take a more passive approach to moderation and did not believe in permanent bans, including from former President Donald Trump.

Musk, who named himself sole director after disbanding the board and expelling top executives, announced plans to create a committee to assess moderation policies and promised no new steps or changes until that this organ takes stock. But his attempts to appease Madison Avenue are met with setbacks, which he blames on “militants”. He reiterated in a tweet today that “nothing has changed with content moderation and we’ve done everything we can to appease activists. Extremely screwed up! They’re trying to destroy free speech in America.

Influential Hollywood actors and others have quit or threatened to quit the platform.

Musk acquired Twitter for $44 billion as the company took on deep debt. A drop in revenue is the opposite of what Twitter needs. Advertising is its main source of income. Layoffs will reduce costs. But the shape of Twitter as a company is becoming less clear by the day.

Julio V. Miller