Elon Musk reportedly wants to fire most Twitter employees, but he told investors 5 months ago he wanted to grow the workforce to 11,000. Here's why experts think he changed his mind.

Samantha Delouya

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Elon Musk's plans for Twitter may have drastically changed since he agreed to the $44 billion purchase in April.

Musk reportedly shared plans to grow Twitter's headcount by 3,600 in May. Now, he reportedly wants to slash it by 75%.

Some analysts predict that the slowing advertising market may be partially to blame for the change.

Elon Musk's plans for running Twitter seem to be drastically different than what he proposed when he initially agreed to purchase the company in April.

In the early days after the agreement, Musk reportedly pitched an ambitious proposal for Twitter to investors that directly contradicts a recent report about his plan for mass firings.

According to a pitch deck viewed by the New York Times in May, Musk planned to grow Twitter's staff from 7,500 to 11,072 by 2025.

Less than 6 months later, Musk wants to slash Twitter's workforce by nearly 75% to a significantly scaled-down staff of 2,000, The Washington Post reports.

Neither Twitter nor Musk immediately responded to Insider's request for comment.

Ali Mogharabi, an analyst who covers Twitter for Morningstar, said he hadn't seen a significant change in Twitter's business to justify such a drastic change in headcount plans by Musk. However, external factors could be to blame.

"A lot has changed outside the business since Musk first spoke with Twitter employees. The uncertainty around the macro environment has certainly increased," Mogharabi said, referring to the slowdown in the overall economy.

He said that Twitter, which makes most of its money from advertising, could see revenue decline as advertisers get spooked by a potential recession.

While Musk's pitch deck from May opened the possibility for layoffs in 2023, there was no indication that he might fire more than 5,000 workers, based on the Times' report.

Mogharabi estimates that Twitter's potential revenue slowdown, combined with the possibility that investors helping to finance Musk's takeover of Twitter might be "demanding for Musk to make this business a cash cow," could account for his reported about-face.

Mark Shmulik, a Twitter analyst at Bernstein, thinks cutting such a large number of workers at Twitter might hurt the company's bottom line, not help it.

"I've always taken this view that you kind of break out these companies into three distinct categories: fat, muscle, and bone. Fat is the stuff like the discretionary projects, muscle is probably revenue generating, but subscale, and the bone is the critical stuff to keep the lights on. If you really are cutting 75% of Twitter's workforce, certainly you're cutting all that fat, but you're cutting deep into some of the muscle too," Shmulik said.

"I guess if the deal closes and if he goes in that direction, we'll certainly see just how lean some of these ad companies can actually run," he added.

Twitter says the company has no plans for layoffs, following claims that Elon Musk planned to cut headcount by 75%

Beatrice Nolan
Oct 21, 2022

Twitter's general counsel emailed staff on Thursday, per a report. 

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Twitter has confirmed the company has no plans in place for company-wide layoffs.

On Thursday, The Washington Post reported that Elon Musk planned to cut Twitter's headcount by nearly 75%.

The reported cuts would have slashed Twitter's 7,500-person workforce to around 2,000, per The Post.

Twitter says the company had no plans in place for company-wide layoffs after The Washington Post reported that Elon Musk planned to cut headcount by nearly 75%.

Reuters first reported the news.

Sean Edgett, Twitter's general counsel, emailed Twitter's staff on Thursday telling them the company did not plan for layoffs, a source who viewed the email told Reuters.

A representative for Twitter confirmed to Insider the company was not planning layoffs.

On Thursday, The Washington Post reported that Elon Musk told prospective investors he would lay off almost 75% of Twitter's workforce. The reported job cuts would have slashed Twitter's 7,500-person workforce down to a staff of around 2,000, per The Post.

The news outlet reported that some job cuts were planned regardless of Musk's takeover. It cited corporate documents and interviews with people familiar with the plans in its report.

After months of litigation, Musk's deal to buy Twitter for $44 billion is expected to close by next Friday.

Some employees have expressed their unease about the deal on social media. Earlier this month, Rumman Chowdhury, the director of Twitter's ML Ethics, Transparency, and Accountability team, tweeted: "Living the plot of succession is fucking exhausting."