Nov 10, 2022 - Technology

Musk warns Twitter of “arduous” road and ends remote work

Photo illustration of Elon Musk holding the twitter logo

Photo illustration: Sarah Grillo/Axios. Photo: Britta Pedersen-Pool/Getty Images

Elon Musk Wednesday night warned the Twitter staffers who remain after massive layoffs that unless they boost subscription income, the company is at risk.

What's happening: In a midnight email to staff, his first since taking control of the company two weeks ago, Musk also issued a new back-to-the-office mandate that, according to sources inside Twitter, will cause many employees to quit.

  • Separately, three executives responsible for security and compliance resigned, adding to the atmosphere of turmoil.

Details: In the note obtained by Axios, Musk apologized for not reaching out to his employees sooner, saying, “Sorry that this is my first email to the whole company, but there’s no way to sugarcoat this.”

  • “Frankly, the economic picture ahead is dire, especially for a company like ours that is so dependent on advertising in a challenging economic climate... The road ahead is arduous and will require intense work to succeed.”
  • Musk said that his concerns about Twitter’s reliance on ad revenue is what promoted his aggressive push into subscriptions over the past ten days, most notably by boosting the price to $8 a month and giving verification badges to every subscriber.
  • “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” he wrote, adding that he wants the company to move towards a 50/50 split between subscription and advertising income.

Between the lines: The back-to-the-office order, widely expected and previously reported, was included in the email sent out in the middle of the night Wednesday, and went into effect beginning Thursday, the next day.

Be smart: The new policy is likely to speed attrition, sources told Axios.

  • Twitter's previous management had committed the company to a permanent policy of flexible and remote work.

Also Thursday, Twitter’s information security, privacy and compliance chiefs all resigned, per Platformer’s Casey Newton.

  • The Verge reported that a Twitter lawyer sent a message to colleagues warning that Musk is at risk of putting the company in further violation of a 2011 Federal Trade Commission consent decree around data privacy, for which it has already paid multiple fines.
  • The FTC told The Washington Post in a statement, “We are tracking developments at Twitter with deep concern. No CEO or company is above the law, and companies must follow our consent decrees."

The big picture: Advertisers continue to be skeptical of Musk’s moves, even after he tried to reassure them in a public Twitter Spaces discussion Wednesday.

  • Prominent users have expressed frustration with Musk’s new verification program, arguing it makes it hard to distinguish official accounts from spoofed ones.
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