Elon Musk said Twitter is now on track to “roughly hit cash flow” next year as the billionaire defended his sweeping cost-cutting measures on the social media platform.
Twitter had previously headed for a “negative cash flow situation of US$3 billion (nearly Rs.24,870 crore) per year ahead of cost cuts, musk said on Wednesday during a speech in a Twitter Sections audio chat.
Since acquiring Twitter on Oct. 27, Musk has laid off 50 percent of the company’s employees and required the remaining employees to commit to long hours and a “hardcore” culture, leading to more attrition. The controversial moves have unsettled advertisers, who make up 90 percent of Twitter’s revenue.
“We have an emergency fire drill on our hands,” Musk said. “That is the reason for my actions.”
Musk said Twitter is already on track to spend $5 billion (nearly Rs.41,440) next year. With US$12.5 billion (nearly Rs.1,03,600 crore) in debt as a result of the acquisition, Twitter faced a net cash outflow of US$6.5 billion (nearly Rs.53,890 crore) with revenues of approximately $3 billion next year. That equates to negative cash flow of $3 billion, Musk said.
During the Spaces session, Musk said his “top priority” is to grow subscriber revenue so that it becomes a significant part of Twitter’s business at a time when companies are cutting advertising budgets in a weak economy.
Twitter currently has just over 2,000 employees, Musk added.
Meanwhile, Musk too said Tuesday that he would step down as Twitter’s chief executive once he found a replacement. His response came in apparent reaction to a poll he launched that suggested users wanted him to resign.
“I will step down as CEO as soon as I find someone stupid enough to do the job!” Musk tweeted, saying he will only run software and server teams at Twitter.
© Thomson Reuters 2022
