Inside Elon Musk’s Takeover of Twitter

SAN FRANCISCO — Elon Musk had a requirement.

On Oct. 28, hours after finishing his $44 billion buyout of Twitter the night time earlier than, Mr. Musk gathered a number of human-resource executives in a “struggle room” within the firm’s workplaces in San Francisco. Put together for widespread layoffs, he informed them, six folks with information of the dialogue mentioned. Twitter’s work drive wanted to be slashed instantly, he mentioned, and people who have been reduce wouldn’t obtain bonuses that have been set to be paid on Nov. 1.

The executives warned their new boss that his plan may violate employment legal guidelines and breach contracts with employees, resulting in worker lawsuits, the folks mentioned. However Mr. Musk’s workforce mentioned he was used to going to court docket and paying penalties, and was not apprehensive in regards to the dangers. So Twitter’s human-resource, accounting and authorized departments scrambled to determine how you can comply along with his command.

Two days later, Mr. Musk discovered precisely how pricey these potential fines and lawsuits might be, three folks mentioned. Delays have been additionally piling up as managers haggled over which workers to let go. He determined to attend on slicing jobs till after Nov. 1.

The order for quick layoffs, the following panic and the about-face replicate the chaos that has engulfed Twitter since Mr. Musk took over the corporate two weeks in the past. The 51-year-old barreled in with concepts about how the social media service ought to function, however with no complete plan to execute them. Then he rapidly bumped into the enterprise, authorized and monetary complexities of working a platform that has been referred to as a world city sq..

The fallout has usually been excruciating, in keeping with 36 present and former Twitter workers and other people near the corporate, in addition to inner paperwork and office chat logs. Some prime executives have been summarily fired by e-mail. One engineering supervisor, upon being informed to chop tons of of employees, vomited right into a trash can. Others slept within the workplace as they labored grueling schedules to satisfy Mr. Musk’s orders.

Twitter, which is beneath monetary stress from debt and a slumping financial system, is now unrecognizable in contrast with what it was a month in the past. Final week, Mr. Musk slashed 50 % of the corporate’s 7,500 workers. Govt resignations have continued. Misinformation proliferated on the platform throughout Tuesday’s midterm elections. A key venture to develop income from subscriptions hit snags. Some advertisers have been aghast.

Mr. Musk, who didn’t reply to a request for remark, informed workers in a gathering on Thursday that Twitter’s state of affairs was grim.

“There’s an enormous adverse money circulation, and chapter shouldn’t be out of the query,” he mentioned, in keeping with a recording heard by The New York Occasions.

Mr. Musk added that they would want to work strenuously to maintain the corporate afloat. “Those that are capable of go onerous core and play to win, Twitter is an efficient place,” he mentioned. “And people who are usually not, completely perceive, however then Twitter shouldn’t be for you.”

‘Let that sink in!’

Mr. Musk arrived at Twitter’s San Francisco workplaces on Oct. 26, toting a white porcelain sink by means of the glass doorways of the constructing. “Let that sink in!” he tweeted on the time, together with a video of his grand entrance.

Leslie Berland, Twitter’s chief advertising officer, inspired workers to say hello to Mr. Musk and escorted him by means of the workplace. He was seen chatting with workers on the firm espresso bar.

However the vibe rapidly modified. The following day, Parag Agrawal, Twitter’s chief govt, and Ned Segal, the chief monetary officer, have been within the workplace, two folks acquainted with the state of affairs mentioned. As soon as they knew Mr. Musk’s acquisition of Twitter was closing that afternoon, they left the constructing, unsure what the brand new proprietor would do.

Mr. Agrawal and Mr. Segal quickly obtained emails saying that they had been fired, two folks acquainted with the state of affairs mentioned. Vijaya Gadde, Twitter’s prime authorized and coverage govt, and Sean Edgett, the overall counsel, have been additionally fired. Mr. Edgett, who was in Twitter’s workplaces on the time, was escorted out.

That night, Twitter hosted a Halloween celebration referred to as “Trick or Tweet” for workers and their households. Some employees wearing costume and tried to maintain the temper festive. Others cried and hugged each other.

Mr. Musk had introduced his personal advisers, lots of whom had labored at his different companies, such because the digital funds firm PayPal and the electrical carmaker Tesla. They parked themselves within the “struggle room,” on the second flooring of a constructing hooked up to Twitter’s headquarters. The realm, which Twitter used to fete big-spending advertisers and dignitaries, was stocked with firm memorabilia.

The advisers included the enterprise capitalists David Sacks, Jason Calacanis and Sriram Krishnan; Mr. Musk’s private lawyer Alex Spiro; his monetary supervisor Jared Birchall; and Antonio Gracias, a former Tesla director. Becoming a member of in have been engineers and others from Tesla; from Mr. Musk’s mind interface start-up, Neuralink; and from his tunneling firm, the Boring Firm.

At instances, Mr. Musk was noticed along with his 2-year-old son, X Æ A-12, at Twitter’s workplace as he greeted workers.

In conferences with Twitter executives, Mr. Musk was direct. On the Oct. 28 assembly with human-resource executives, he mentioned he wished to scale back the work drive instantly, earlier than a Nov. 1 date when workers would obtain recurrently scheduled retention bonuses.

One Twitter workforce started making a monetary mannequin to indicate the price of the layoffs. One other constructed a mannequin to reveal how rather more Mr. Musk would possibly pay in authorized charges and fines if he proceeded with the speedy cuts, three folks mentioned.

On Oct. 30, Mr. Musk obtained phrase that the speedy method may price hundreds of thousands of {dollars} greater than laying folks off with their scheduled bonuses. He agreed to delay, 4 folks mentioned.

However he had a situation. Earlier than paying the bonuses, Mr. Musk insisted on a payroll audit to substantiate that Twitter’s workers have been “actual people.” He voiced considerations that “ghost workers” who mustn’t obtain the cash lingered in Twitter’s programs.

Mr. Musk tapped Robert Kaiden, Twitter’s chief accounting officer, to conduct the audit. Mr. Kaiden requested managers to confirm that they knew sure workers and will verify that they have been human, in keeping with three folks and an inner doc seen by The Occasions.

The Nov. 1 bonus date got here and went with no mass layoffs. Mr. Kaiden was fired the subsequent day and marched out of the constructing, 5 folks with information of the state of affairs mentioned.

A visit to New York

As Twitter managers compiled lists for layoffs, Mr. Musk flew to New York to satisfy with advertisers, who present the majority of Twitter’s income.

In some advertiser conferences, Mr. Musk proposed a system for Twitter customers to decide on the type of content material that the service uncovered them to — akin to G to NC-17 film scores — implying that manufacturers may then goal their promoting on the platform higher. He additionally dedicated to product enhancements and extra personalization for customers and advertisements, two folks with information of the discussions mentioned.

However his outreach was undercut by the departures of two New York-based Twitter executives — Ms. Berland and JP Maheu, a vice chairman answerable for promoting. They have been well-known within the promoting neighborhood.

These Twitter executives “had nice relationships with the senior-most folks on the Fortune 500 — they have been extremely clear and inclusive,” mentioned Lou Paskalis, a longtime promoting govt. “These issues engender great belief, and people issues at the moment are in query.”

Manufacturers together with Volkswagen Group, Common Motors and United Airways have mentioned they may pause promoting on Twitter as they consider Mr. Musk’s possession of the platform.

Mr. Musk elevated some managers at Twitter. He tapped Esther Crawford, a product supervisor, to revamp a subscription service referred to as Twitter Blue. Mr. Musk wished a brand new model of the service, which might price $8 a month and embrace premium options and the verification verify mark that was beforehand assigned at no cost to the accounts of celebrities, journalists and politicians to convey their authenticity.

He laid down a deadline: The workforce should end Twitter Blue’s adjustments by Nov. 7 or its members could be fired.

Final week, Ms. Crawford shared a photo of herself sleeping at Twitter’s San Francisco workplaces in a sleeping bag and a watch masks, with the hashtag #SleepWhereYouWork.

Her message rubbed some colleagues the mistaken approach. They questioned in personal chats why they need to commit lengthy working hours to a person who may hearth them, in keeping with 5 folks and messages seen by The Occasions. On Twitter, Ms. Crawford responded to what she referred to as “hecklers” by saying she had obtained supportive messages from different entrepreneurs and “builders of all sorts.”

The ax falls

The scope of layoffs was a shifting goal. Twitter managers have been initially informed to chop 25 % of the work drive, three folks mentioned. However Tesla engineers who reviewed Twitter’s code proposed deeper cuts to the engineering groups. Executives overseeing different components of Twitter have been informed to develop their layoff lists.

Twitter executives additionally urged assessing the lists for variety and inclusion points so the cuts wouldn’t hit folks of colour disproportionately and to keep away from authorized bother. Mr. Musk’s workforce brushed apart the suggestion, two folks mentioned.

On Nov. 2, workers stumbled upon an open channel within the inner Slack messaging system the place human sources and authorized groups have been discussing the layoffs. In a message seen by The Occasions, one worker mentioned 3,738 employees might be laid off, or about half the work drive. The message was extensively shared internally.

That night, Mr. Musk met with some advisers to decide on the discount, in keeping with a calendar invitation seen by The Occasions. They have been joined by workers from Twitter’s human sources and workers from his different firms.

Anticipating the cuts, workers started bidding farewell to their colleagues, buying and selling telephone numbers and connecting on LinkedIn. In addition they pulled collectively paperwork and inner sources to assist employees who survived the layoffs.

One engineering supervisor was approached by Mr. Musk’s advisers — or “goons,” as Twitter workers referred to as them — with a listing of tons of of individuals he needed to let go. He vomited right into a trash can close to his ft.

Late on Nov. 3, an e-mail landed in workers’ inboxes. “In an effort to put Twitter on a wholesome path, we’ll undergo the tough strategy of decreasing our international work drive,” the e-mail, signed “Twitter,” mentioned.

Pandemonium adopted. Whereas the observe mentioned workers would obtain a follow-up e-mail the subsequent morning about whether or not they nonetheless had jobs, many discovered themselves locked out of e-mail or Slack that night time, a sign that they had been laid off. Those that remained in Slack posted saluting emojis en masse as a send-off for co-workers.

The cuts have been monumental. In Redbird, Twitter’s platform and infrastructure group, Mr. Musk shed quite a few managers. The unit additionally misplaced about 80 % of its engineering workers, elevating inner considerations in regards to the firm’s capability to maintain its website up and working.

In Bluebird, Twitter’s client division, dozens of product managers have been laid off, leaving simply over a dozen of them. The brand new ratio of engineers to managers was 70 to 1, in keeping with one estimate.

The aftermath

As layoffs unfolded, tech recruiters sensed alternative. High managers at rival firms corresponding to Meta and Google despatched messages to among the workers being let go from Twitter, mentioned two individuals who obtained the notes.

Most of Mr. Musk’s subordinates remained quiet all through the method. However Mr. Calacanis, the enterprise capitalist, had been lively on Twitter responding to product options and considerations.

Final week, Mr. Musk dispatched a lieutenant to the “struggle room” to ask Mr. Calacanis, who was there, to chill it on Twitter and cease performing as if he have been main product improvement or coverage, folks acquainted with the alternate mentioned.

“To be clear, Elon is the product supervisor and CEO,” Mr. Calacanis later tweeted. “As an influence person (and that’s all I’m!) I’m actually excited.”

By final Saturday, Mr. Musk’s advisers realized that the cuts could have been too deep, 4 folks mentioned. Some requested laid-off engineers, designers and product managers to return to their outdated jobs, three folks acquainted with the conversations mentioned. The tech e-newsletter Platformer earlier reported the outreach.

At Goldbird, Twitter’s income division, the corporate needed to deliver again those that ran key money-generating merchandise that “nobody else is aware of how you can function,” folks with information of the enterprise mentioned. One supervisor agreed to attempt rehiring some laid-off employees, however expressed considerations that they have been “weak, lazy, unmotivated and so they could even be in opposition to an Elon Twitter,” two folks acquainted with the matter mentioned.

On Monday, some Twitter workers arrived at work to search out that sure programs that they had relied on now not labored. In San Francisco, an engineer found that some contracts with distributors that present software program for managing person information had been placed on maintain or had expired, and that the managers and executives who may repair the issue had been laid off or resigned.

On Wednesday, employees in Twitter’s New York workplace have been unable to make use of the Wi-Fi after a server room overheated and knocked it offline, two folks mentioned.

Mr. Musk plans to start making workers pay for lunch — which had been free — on the firm cafeteria, two folks mentioned.

An inner conflict

Inside Twitter, some workers have clashed with Mr. Musk’s advisers.

This week, safety executives disagreed with Mr. Musk’s workforce over how Twitter ought to meet its obligations to the Federal Commerce Fee. Twitter had agreed to a settlement with the F.T.C. in 2011 over privateness violations, which requires the corporate to submit common studies about its privateness practices and open its doorways to audits.

On Wednesday, a day earlier than a deadline for Twitter to submit a report back to the F.T.C., Twitter’s chief info safety officer, Lea Kissner; chief privateness officer, Damien Kieran; and chief compliance officer, Marianne Fogarty, resigned.

In inner messages later that day, an worker wrote in regards to the resignations and urged that inner privateness opinions of Twitter’s merchandise weren’t continuing as they need to beneath the F.T.C. settlement.

Some engineers might be required to “self-certify” that their tasks complied with the settlement, relatively than counting on opinions from attorneys and executives, a shift that might result in “main incidents,” the worker wrote.

“Elon has proven that his solely precedence with Twitter customers is how you can monetize them,” the particular person wrote within the message, which was seen by The Occasions.

The worker added that Mr. Spiro, Mr. Musk’s lawyer, had mentioned the billionaire was prepared to take dangers. Mr. Spiro, the worker mentioned, informed employees that “Elon places rockets into area — he’s not afraid of the F.T.C.”

The F.T.C. mentioned that it was monitoring the developments at Twitter with “deep concern” and that “no C.E.O. or firm is above the legislation.” Mr. Musk later despatched workers an e-mail saying Twitter will adhere to the F.T.C. settlement.

On Thursday, extra Twitter executives resigned, together with Kathleen Pacini, a human-resource chief, and Yoel Roth, the top of belief and security.

On the assembly with workers that day, Mr. Musk tried to sound a observe of optimism about Twitter’s future.

“Twitter can type an extremely priceless service to the world and be the general public city sq.,” he mentioned, noting it must be a “battleground of concepts” the place debate may “take the place of violence in loads of circumstances.”

Reporting was contributed by Kevin Roose, Lauren Hirsch, Kitty Bennett and David McCabe.