Thanks to cost cuts, Twitter ‘will be fine’ next year: Musk

Thanks to cost cuts, Twitter ‘will be fine’ next year: Musk

Twitter “will be fine” next year thanks to the drastic cost-saving measures implemented by Elon Musk since his takeover of Twitter, the entrepreneur said on Wednesday.

“With the changes we’re making, massively cutting expenses and increasing revenue from subscriptions, I think Twitter is going to be okay next year,” the platform owner told a conference call. online on social network.

Since becoming Twitter’s largest shareholder in late October, Elon Musk has laid off about half of the company’s 7,500 employees.

He announced on Tuesday that he planned to hand over the management of the San Francisco (California) company as soon as he “found someone crazy enough” to succeed him.

He thus took into account the result of a poll he launched on Sunday according to which 57% of the approximately 17 million participating users declared themselves in favor of his departure.

The man who is also at the helm of Tesla and SpaceX said Wednesday that, according to his projections, the social network could achieve a turnover of around 3 billion dollars next year.

If this figure is confirmed, it would be equivalent to a contraction of 41% compared to the revenues achieved in 2021.

According to the billionaire, had no changes been made to Twitter’s cost structure, the company would have spent between $6 billion and $6.5 billion in 2023.

This total includes the payment of part of the principal and interest relating to the loans contracted by Elon Musk to buy Twitter and which must now be honored by the group, and not by the entrepreneur.

He estimates this payment at around one and a half billion dollars for the next year alone.

The social network thus risked ending the year 2023 with a reduced cash flow of around 3 billion dollars, according to estimates by the new boss.

“It’s not good,” commented Elon Musk, “as Twitter has (currently) a billion dollars in cash.”

If these projections were to materialize, the manager and his co-shareholders would have had to bail out the company, failing which it risked being insolvent.

“We would be dead,” he said of such a situation.

“That’s why I’ve spent the last five weeks cutting costs like crazy,” Musk told the conference.

He compared Twitter’s situation upon his arrival to that of “a plane hurtling towards the ground at full speed with burning engines and controls that don’t work”.