Elon Musk officially moved Twitter into his own cage last week. The world’s richest man has wasted no time making changes at the social media company, firing top executives and dissolving the board of directors. More bloodletting is coming. As much as half of Twitter’s 7,500-strong workforce could be laid off. There are plans to charge Twitter users $8 a month for a verified account, which looks odd.
Musk will need all the cost savings and revenues he can get. His $44bn acquisition of the world’s “digital town square” is one of the largest leveraged buyouts in history. To fund the deal, Musk loaded Twitter — lossmaking for 10 of the past 12 years — with $12.7bn of debt.
Analysts say net interest expense will climb from $51mn last year to over $1bn a year as a result. Having vastly overpaid to free “the bird”, Musk will face an uphill battle to keep Twitter in the air financially.