NYT TECHNOLOGY: As Elon Musk Cuts Costs at Twitter, Some Bills Are Going Unpaid
By Mike Isaac and Ryan Mac
Section: Technology
Source: New York Times
Published Date: November 22, 2022 at 02:00AM
Mr. Musk and his advisers are examining all types of expenses at Twitter. Some of the social media company’s vendors have gotten stiffed.
By Mike Isaac and Ryan Mac
Section: Technology
Source: New York Times
Published Date: November 22, 2022 at 02:00AM
Mr. Musk and his advisers are examining all types of expenses at Twitter. Some of the social media company’s vendors have gotten stiffed.
SAN FRANCISCO — Before Elon Musk bought Twitter last month, the company’s executives had racked up hundreds of thousands of dollars in travel invoices that the social media service planned to pay.
But once Musk took over the company, he refused to reimburse travel vendors for those bills, current and former Twitter employees said. Musk’s staff said the services were authorized by the company’s former management and not by him. His staff have since avoided the calls of the travel vendors, the people said.
Musk has embarked on an enormous cost-cutting campaign since closing his $44 billion acquisition of Twitter. He initially slashed half of the company’s 7,500-person workforce, fired workers and continued with layoffs as recently as Monday. But he has also conducted a sweeping examination of all types of other costs at the company, instructing staff to review, renegotiate and in some cases not pay Twitter’s outside vendors at all, eight people with knowledge of the matter said.
Musk and his advisers have trained their sights on computing costs that support Twitter’s underlying infrastructure, travel expenses, software services, real estate and even the company’s normally lavish in-office cafeteria food. Twitter’s spending has dropped, but the moves have spurred complaints from insiders — as well as from some vendors who are owed millions of dollars in back payments.
Musk’s actions reflect the financial pressure that Twitter is under. The company took on $13 billion in loans for his buyout of the social network. The interest payments for that debt totals more than $1 billion annually. And Twitter has long faced financial difficulties, often losing money and struggling to keep up with rivals like Facebook and Google that effectively monetized their advertising products. Some advertisers have paused spending on Twitter as they evaluate Musk’s ownership.
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But once Musk took over the company, he refused to reimburse travel vendors for those bills, current and former Twitter employees said. Musk’s staff said the services were authorized by the company’s former management and not by him. His staff have since avoided the calls of the travel vendors, the people said.
Musk has embarked on an enormous cost-cutting campaign since closing his $44 billion acquisition of Twitter. He initially slashed half of the company’s 7,500-person workforce, fired workers and continued with layoffs as recently as Monday. But he has also conducted a sweeping examination of all types of other costs at the company, instructing staff to review, renegotiate and in some cases not pay Twitter’s outside vendors at all, eight people with knowledge of the matter said.
Musk and his advisers have trained their sights on computing costs that support Twitter’s underlying infrastructure, travel expenses, software services, real estate and even the company’s normally lavish in-office cafeteria food. Twitter’s spending has dropped, but the moves have spurred complaints from insiders — as well as from some vendors who are owed millions of dollars in back payments.
Musk’s actions reflect the financial pressure that Twitter is under. The company took on $13 billion in loans for his buyout of the social network. The interest payments for that debt totals more than $1 billion annually. And Twitter has long faced financial difficulties, often losing money and struggling to keep up with rivals like Facebook and Google that effectively monetized their advertising products. Some advertisers have paused spending on Twitter as they evaluate Musk’s ownership.
Read more at: https://www.nytimes.com/2022/11/22/technology/elon-musk-twitter-cost-cutting.html
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