Musk’s $44 billion deal is headed toward a close at the end of next week, likely on Friday, two people familiar with the situation told Insider. Beyond that, it’s unclear what’s next, although Twitter will almost certainly see steep cuts to staff, including CEO Parag Agrawal and other top executives, sources said.
Biden administration officials have discussed a security investigation into some of Musk’s dealings, including his acquisition of Twitter, Bloomberg reported, but this is not seen as a genuine threat to the deal since there there is no active investigation and one does not seem to be forthcoming, according to a person familiar with the deal. A bigger problem could be that Musk has done “absolutely no” transitional work for his impending takeover, that person added.
Even with no transitional work accomplished by Musk yet, he is expected to make “huge cuts” to Twitter’s current staff, that person said. Top executives like Agrawal are likely to be fired “almost immediately,” they added.
“No one knows who or how this thing is running post-close,” another person familiar with the company and transaction said. Twitter declined to comment. Musk’s representatives did not respond to a request for comment.
The Washington Post on Thursday reported that Musk told potential co-investors in the Twitter deal that he intends to reduce the number of Twitter employees by up to 75%, leaving it with roughly 2,000 people.
Twitter reported last year that it had grown to 7,500 people, but it continued hiring earlier this year and swelled to about 8,200 people in June, as Insider previously reported. Hefty cuts have been expected for months, and Musk told employees during his one and only meeting with them in June that they could expect layoffs in order to get the company “healthy.”
“I do not take actions which are disruptive to the health of the company,” Musk said during the meeting. Workers started to leave the company in droves after Musk’s comments, as Insider previously reported.
Even though Musk likely does need some executives to stay, members of the C-suite have little incentive to do so. Several are entitled to massive payouts with “change in control” provisions in their contracts: Agrawal will receive $38.7 million so long as Musk fires him; Ned Segal, Twitter’s CFO, is set to receive $25.4 million; Vijaya Gadde, chief legal officer, $12.5 million; and Sarah Personette, chief customer officer, $11.2 million.
Should Musk go ahead and ultimately decimate Twitter’s headcount, staffers said it would cause “just chaos” and be “insane.” Another employee admitted, “you could run Twitter with about 2,000 people,” although no one at the company would like it.
“You certainly wouldn’t innovate with that, but you’d be able to run it,” the person added. “At its core, this thing hasn’t changed since it was built.”
Another staffer estimated the combined salaries of that many employees could roughly equal the $1.5 billion of Twitter debt Musk will need to service sometime next year.
A few months back, before Musk tried to back out of buying Twitter altogether, The New York Times reported the deck Musk shared with potential investors and banks actually detailed an increase in headcount by almost 50% from where it is today, over the course of about three years.
Since then, Musk said his renewed commitment to acquiring Twitter is part of his plan to make X, his “app for everything.” He mentioned China’s hugely popular “super app” WeChat as an example. To bring so many new features to Twitter, Musk would likely need more than 2,000 people to do it.
In comparison, WeChat, which has more than 1 billion daily active users, has roughly 3,000 people working for it, according to a person with knowledge of WeChat’s business.
Known to be mercurial and prone to changing his mind, Musk may have done just that in telling investors how many people Twitter needs to operate. More likely, Musk is eager for as many people to quit the company as possible, instead of having to deal with layoffs and any severance considerations that may be in employment contracts, two people familiar with the deal said.
Musk may just get his way. The next equity event at Twitter, when shares of employee stock vest, is coming up on November 1. Under the terms of the Musk agreement, employee shares will now translate to cash upon vesting, instead of new grants of company stock, as Insider previously reported. Three current employees said that many colleagues plan to leave on or immediately after November 1, as many did after the last equity event at the start of August.
Are you a Twitter employee or someone with insight to share? Contact Kali Hays at khays@insider.com, on secure messaging app Signal at 949-280-0267, or through Twitter DM at @hayskali. Reach out using a non-work device.
