Elon Musk says Twitter cost cuts stemmed cash burn

REUTERS
REUTERS

Summary

  • Billionaire CEO says social-media company was on track to log $3 billion in negative free-cash flow before cost cuts

Elon Musk said Twitter Inc. was on track to post negative cash flow of $3 billion a year before the company slashed costs in part by cutting thousands of jobs.

“That is why I spent the last five weeks cutting costs like crazy," Mr. Musk said during a Tuesday evening conversation on Twitter Spaces. “That’s the reason for my actions. They may seem sometimes spurious or odd or whatever. It’s because we have an emergency fire drill on our hands."

“This company is like, basically, you are in a plane that is headed toward the ground at high speed with the engines on fire and the controls don’t work," he said.

With the changes recently implemented at the company, including the cost-cutting efforts and the building of subscriber revenue, Mr. Musk said he expects the company will be roughly cash-flow break-even next year.

“I now think that Twitter will, in fact, be OK next year," he said.

In October, Mr. Musk, who also serves as CEO of Tesla Inc., closed his deal to buy Twitter for $44 billion, saddling the company with nearly $13 billion in debt.

Layoffs at the company began shortly after Mr. Musk closed the deal. Mr. Musk on Tuesday said Twitter is at “a little over 2,000 people" after the job cuts and previously had close to 8,000 employees.

Mr. Musk also addressed his efforts to keep advertisers on the platform after an exodus last month. He said Tuesday he has spoken with a number of advertisers, and that they have made reasonable requests. Many, he said, want to see strong return-on-investment plans.

“In prosperous times, there is plenty of budget for advertising and you can get away with unclear ROI, but when times are tough, then the hard questions of return on investment are asked," he said. “And when you do not have a clear answer then advertisers don’t want to advertise because they’re being sane."

This story has been published from a wire agency feed without modifications to the text

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