In the second week of Elon Musk’s reign, Twitter has had an interesting week. That would be an understatement.
Trying to keep up with the unfolding saga of Musk owning a microblogging platform is not easy. Since Monday, several high-profile leaders have left the company, product changes were made and brought back without much clear internal communication, and now the FTC is concerned that Musk’s Twitter is ignoring its obligations under the previous agreement.
Musk in the background continues to tweet as his $44 billion investment is not ready to explode in front of him. So what’s going on there?
It was the weekend
Elon may have acquired Twitter on October 27th, but it wasn’t until late last week that things started to get interesting.
Musk began the mass layoffs on Twitter on Friday, Nov. 4, and the event was described as chaotic by many employees. Reports surfaced that people had been removed from their work accounts and Twitter systems on Thursday night — some in the middle of meetings — and that by Friday, half the 7,500-person company was out of a job.
A group of five former Twitter employees filed a class action lawsuit against Twitter, saying the layoffs violated the federal and California NOTICE Acts, which set a 60-day notice period for mass layoffs, including at Twitter.
Musk had previously fired Twitter management, including CEO Parag Agrawal, within days of taking over the company, and advertisers quickly began freezing ad spending on Twitter until things were sorted out, which they certainly weren’t.
Over the weekend, it became clear to some on Twitter that laying off half the company was not a good idea, and several dozen people are being asked to return to the company for two reasons: Some were laid off by accident, and others were laid off. before leadership had a chance to understand what they needed to build the features Musk wanted for the platform.
Reports quickly surfaced that Twitter engineers were asked back mostly says no. Allegedly, those who agree to return are mostly foreign workers on visas who will be deported from the United States without jobs.
Let the musk sink in
The beginning of the week was relatively quiet on Twitter, aside from Elon being a poor sport about people who look like him, announcing that accounts engaging in parodies without clear clarification would be banned without warning.
On Monday, Musk claimed Twitter users were at an all-time high, likely in response to an MIT Technology Review investigation that found nearly a million Twitter users had deactivated their accounts since Musk bought the platform in late October. Twitter says it has about 237 million daily monetized users.
Disinformation on Twitter also increased earlier this week ahead of the US midterm elections, which would not have happened without Musk leading the platform.
On Tuesday, news broke that Musk had sold 19.5 million Tesla shares worth $3.95 billion, and the world’s richest man has since told Twitter employees he needed to save the company.
One of Musk’s plans to make more money at Twitter, a must-do, has emerged as plans to turn Twitter Blue into an $8-a-month service that will give paid accounts a verification token. Blue subscribers’ tweets also appear higher in searches and replies than non-subscribers, making Twitter a paid speech platform.
The paid blue tick will not come with any actual vetting process, and news of the plan has sparked backlash as people worry about the potential for impersonation, which prompted Musk to ban “impersonators” over the weekend.
On Wednesday, Twitter began using the “Official” account label to distinguish paid verification badges from those that earned them, but only in some cases, such as high-profile brands.
The news has the Twitterverse fixated on Musk and Robin Wheeler, Twitter’s customer solutions leader Twitter went to Spaces Discussing changes to Twitter and the company’s plans to win back the trust of advertisers. During the call, Musk revealed that he’s also considering turning Twitter into a payments platform, bringing it back to its PayPal roots. Overall, the call did not go well based on what followed.
On Tuesday and Thursday morning, Marianne Fogarty, Twitter’s Chief Compliance Officer, Leah KissnerTwitter’s Chief Information Security Officer, Chief Privacy Officer Damien Kieran and Joel Rothhead of trust and security, all gone, leaving Twitter with little in the way of security or compliance leadership.
Wheeler was also briefly rumored to be leaving, but he said he was still with the company.
The team’s departure may be due to the FTC’s eyes returning to Twitter, which it had settled with since 2010 after it was found to have failed to comply with privacy and security rules. The FTC also fined Twitter $150 million earlier this year for using account security information to sell targeted ads.
Posted by Mike Masnick of TechDirt a section The FTC’s settlement with Twitter indicates that the social media platform must notify the regulator when it makes product changes. Something that perhaps hasn’t been done since Musk took office.
Shortly after the departures, an unnamed Twitter lawyer posted a letter on the company’s internal Slack saying that Alex Spiro, Twitter’s current head of legal and personal counsel for Musk, said: “Elon is putting rockets into space, not afraid.” of the FTC.”
The letter says engineers are forced to self-certify their changes for FTC compliance, which the lawyer said would put Twitter at risk of billions of dollars in fines. “It is extremely harmful to Twitter’s longevity,” the lawyer said.
On Wednesday, Musk made his first official contact with Twitter’s remaining employees, telling them that not only was Twitter at risk of bankruptcy, but that the company was ending its longstanding telecommuting policy and forcing everyone to stay in the office. “At least” 40 hours per week starting the next day.
In relation to this bankruptcy threat, consider that Twitter made a profit of $513 million in the first quarter of 2022, mainly from the sale of MoPub, and a loss of $270 million in the second quarter, ending the period with a cash equivalent of $2.68 billion.
President Biden also said the foreign investment that made the Tesla mogul’s purchase of Twitter possible was “worth looking at.” Prince Al Waleed bin Talal Al Saud and Qatar Holding, as well as Oracle’s Larry Ellison and others, raised funds to support the acquisition.
Thursday saw the disappearance of the Official tag and the launch of a new Twitter Blue app that lets people buy a verified token for $8 a month. Twitter also said the blue check would remain for verified users with its “legacy” verification system.
Brands were imitated, politicians parodied as cannibals, and, as predicted, fraud ensued. Someone with a paid blue tick impersonated insulin maker Eli Lilly on Twitter to say the drug was now free, sending the pharmaceutical giant’s stock price down six percent after the bogus claim went viral.
Musk also met with Twitter employees for the first time yesterday and reportedly told them, as he said in an email to employees the day before: Twitter’s finances are in bad shape, the company could collapse, and everyone needs to work harder.
The letter also attempted to answer questions about Twitter’s compliance with FTC mandates. According to Musk, “Twitter will do everything in its power to comply with both the letter and the spirit of the FTC’s consent decree. Anything you read to the contrary is completely false.”
Musk’s own attorney also tried to reassure employees by saying that no one would be arrested in connection with the FTC situation.
Friday ‘fixes’ and beyond
Twitter woke up today to find that users were unable to subscribe to not only Twitter Blue, but also “Original” tags. they returned in selected accounts.
Users who earned blue vouchers by subscribing to Twitter Blue reported missing and app follower Jane Manchun Wong. he said he no longer saw Twitter Blue’s approved purchasing capability in the Twitter API.
At the time of writing, the option to subscribe to Twitter Blue also appears to have been removed from the app, whereas earlier today it was available but showed an availability error. Musk also threatened to take away verified checkmarks from non-subscribers over the next few months.
More than 140,000 accounts have reportedly signed up for the latest Twitter Blue feature set, which generates $13.4 million a year. Before Musk’s takeover, about 420,000 accounts had confirmed blue ticks. Twitter’s annual revenue in 2021 was $5 billion.
What happens next for Twitter is anyone’s guess. In another cheeky Musk tweet earlier today, the Twitter CEO shared picture A neon #GameOver sign that says “Twitter HQ is great.”
The photo, which Musk said was taken in a video arcade and bar area on Twitter, was tweeted without context before specifying the location. “Humor” aside, such jokes are unlikely to inspire credence with cautious advertisers or eagle-eyed government officials.
One thing is certain: Musk’s purchase of the company saddled it with $13 billion in debt, and Twitter was responsible for $1 billion in interest payments each year. If Musk is flattered, those financial obligations and the unhappy banks attached to them may be part of the reason. However, the growing risk of bankruptcy probably won’t make the world’s (currently) richest man act in a calm, collected manner – expect more boredom.
Now who’s ready for a nice, relaxing weekend? ®