HomeTechnologyAs Elon Musk Cuts Costs at Twitter, Some Bills Are Going Unpaid

As Elon Musk Cuts Costs at Twitter, Some Bills Are Going Unpaid

SAN FRANCISCO — Earlier than Elon Musk purchased Twitter final month, the corporate’s executives had racked up lots of of 1000’s of {dollars} in journey invoices that the social media service deliberate to pay.

However as soon as Mr. Musk took over the corporate, he refused to reimburse journey distributors for these payments, present and former Twitter workers mentioned. Mr. Musk’s workers mentioned the providers have been licensed by the corporate’s former administration and never by him. His workers have since prevented the calls of the journey distributors, the individuals mentioned.

Mr. Musk has launched into an unlimited cost-cutting marketing campaign since closing his $44 billion acquisition of Twitter. He initially slashed half of the corporate’s 7,500-person work power, fired employees and continued with layoffs as lately as Monday. However he has additionally performed a sweeping examination of all kinds of different prices on the firm, instructing workers to evaluation, renegotiate and in some circumstances not pay Twitter’s exterior distributors in any respect, eight individuals with information of the matter mentioned.

Mr. Musk and his advisers have skilled their sights on computing prices that help Twitter’s underlying infrastructure, journey bills, software program providers, actual property and even the corporate’s usually lavish in-office cafeteria meals. Twitter’s spending has dropped, however the strikes have spurred complaints from insiders — in addition to from some distributors who’re owed hundreds of thousands of {dollars} in again funds.

Mr. Musk’s actions mirror the monetary strain that Twitter is underneath. The corporate took on $13 billion in loans for his buyout of the social community. The curiosity funds for that debt totals greater than $1 billion yearly. And Twitter has lengthy confronted monetary difficulties, usually dropping cash and struggling to maintain up with rivals like Fb and Google that successfully monetized their promoting merchandise. Some advertisers have paused spending on Twitter as they consider Mr. Musk’s possession.

Mr. Musk, 51, has advised Twitter workers that “the financial image forward is dire” and that chapter is perhaps within the playing cards for the corporate.

He didn’t reply to a request for remark.

Twitter’s previous leaders tried to get the corporate to profitability by means of totally different methods, from pushing reside video to a spate of audio choices. Mr. Musk’s plan was extra austere. He introduced in allies from his different corporations — together with Antonio Gracias, a longtime confidant and former director of the electrical carmaker Tesla; Jared Birchall, the top of Mr. Musk’s household workplace; and Steve Davis, who leads Mr. Musk’s tunneling undertaking, the Boring Firm — to pore over Twitter’s books.

Their directive was easy: Lower, lower, lower.

That helped result in the mass layoffs at Twitter this month. And behind the scenes, no bills are off the desk.

Twitter’s finance workers, which has been drastically diminished, have been instructed to comb by means of firm bills and worker expense experiences “line by line,” individuals with information of the matter mentioned. They’ve been requested to particularly ensure that workers and their bills are for “actual individuals and actual bills,” they mentioned.

Mr. Musk additionally issued an order to gradual or in some circumstances halt transfers of funds to Twitter’s distributors and contract providers, the individuals mentioned. Any expenditures for providers must be authorized by Mr. Birchall, three individuals mentioned. Mr. Musk has since declined to pay for the journey providers incurred by the previous Twitter executives, the individuals mentioned.

He’s additionally wanting on the firm’s leases for workplace area, three individuals mentioned, bucking on making funds and hoping to renegotiate or decide out of some commitments completely. Twitter leases workplace area the world over, however the layoffs have diminished the necessity for a lot of that actual property.

Twitter’s partnerships crew was additionally instructed to renegotiate its multiyear content material offers with main sports activities entities, like one it struck with the N.F.L. wherein the social media firm pays the league to provide unique audio and video content material for its platform, two individuals acquainted with the plans mentioned. Twitter has struck related offers with different media corporations, together with Condé Nast, the N.B.A. and Fox Sports activities Community.

An N.F.L. spokesman didn’t instantly have a remark.

Mr. Davis, the president of the Boring Firm, has additionally directed Twitter workers to renegotiate the offers that the corporate has with companies comparable to Amazon and Oracle, which give computing and tech providers, the individuals mentioned. The staff have been advised to counsel to these corporations that Mr. Musk’s companies wouldn’t work with them sooner or later in the event that they refused to renegotiate, the individuals mentioned.

After Twitter’s contract with one software program vendor expired underneath Mr. Musk’s possession, that firm voided a reduction it had given to Twitter, one engineering supervisor mentioned.

Representatives for Amazon and Oracle didn’t reply to requests for remark. An electronic mail to the Boring Firm was not instantly returned.

Company bank cards for Twitter workers have additionally been shut off, three of the individuals mentioned. One employee mentioned she tried to purchase farewell drinks for colleagues after the mass layoffs, solely to have her company bank card declined on the bar.

When Mr. Musk referred to as for Twitter workers to return to the corporate’s San Francisco workplaces final week to fulfill with him, some employees mentioned they have been involved about reserving the journey on their private bank cards and feared not getting reimbursed. Beneath Mr. Musk’s possession, Twitter has delayed paying or has denied expense experiences that have been submitted for approval, 4 present and former workers mentioned.

Mr. Musk has ended different longtime perks at Twitter. He has reduce free lunches, which he mentioned was costing the corporate more than $400 “per lunch served.” (One worker who labored on the corporate’s lunch program disputed Mr. Musk’s math.) In Twitter’s New York workplace on Monday, the cafeteria, which as soon as had objects like grilled shrimp, served two kinds of macaroni and cheese, together with a salad bar, one particular person mentioned.

Different advantages, like backed fitness center passes, cellphone and web payments, in addition to baby care stipends, have additionally been trimmed, two individuals mentioned.

Mr. Musk’s crew, together with his private lawyer Alex Spiro, have ended Twitter’s ties with some exterior regulation companies that labored with the corporate’s former administration in a lawsuit over the $44 billion buyout, one particular person acquainted with the transfer mentioned. Earlier this yr, Twitter sued Mr. Musk after he tried backing out of his settlement to purchase the corporate.

Mr. Spiro didn’t reply to a request for remark.

A few of Twitter’s social initiatives have additionally began dropping by the wayside. The corporate’s philanthropic division, Twitter for Good, has misplaced many workers and checks promised to some nonprofit teams haven’t been obtained, two individuals mentioned. The San Francisco Normal earlier reported on Twitter’s philanthropy points.

“Elon has proven that he cares solely about recouping the losses he’s incurring on account of failing to get out of his binding obligation to purchase Twitter,” one worker wrote on Twitter’s inside Slack messaging system this month.

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