Twitter owner and chief executive Elon Musk is defending the major changes that he has made at the platform since taking it over, saying they were aimed at turning around a significant revenue shortfall at the social media giant.
Musk said during a Twitter Spaces chat Wednesday that the company was headed for a “negative cash flow situation of $3 billion a year” when he took the helm, explaining, “So that’s why I spent the last five weeks cutting costs like crazy.”
The billionaire, who also heads electric vehicle behemoth Tesla, immediately began slashing Twitter’s workforce after he purchased the company in late October. Within weeks, roughly two-thirds of the platform’s original 7,500 employees were out of a job.
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In addition to cutting costs through terminations and ending some perks at Twitter headquarters, Musk has made a number of moves aimed at increasing revenue, such as charging for verification for users.
The new Twitter owner acknowledged that his actions “may seem sometimes spurious or odd or whatever,” but he said they were necessary because “we have an emergency fire drill on our hands.”
Musk said he had to make drastic changes at Twitter because otherwise the company was headed for disaster. From his standpoint, he said, it was like being “in a plane that is headed towards the ground at high speed with the engine on fire and the controls don’t work.”
But now he believes Twitter should be back on track financially in 2023.
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“With the changes that we’re making here on massively reducing the burn rate and building subscriber revenue, I now think that Twitter will, in fact, be OK next year,” Musk said during the Spaces discussion. “I think we will be … roughly cash-flow break-even – that’s what I expect for next year.”
Musk said earlier this week that he will resign as CEO of Twitter as soon as he finds a replacement, after Twitter users voted in a poll for him to step down.
Reuters contributed to this report.