The problems are linked for Twitter since the arrival of Elon Musk

Twitter

Jack Dorsey, the co-founder of Twitter Inc., is not at the end of his troubles. After agreeing to transfer his Twitter shares, worth almost a billion dollars, into the new private company, he watches helplessly as Elon Musk devastates.

In less than two weeks, Elon Musk managed to alienate a number of major advertisers, fire almost half of Twitter’s staff, ban remote working for platform employees and violate an agreement with the Federal Trade Commission (FTC). In addition, the billionaire sends very negative signals about Twitter’s prospects: during a public meeting, Elon Musk said that the social network was losing billions of dollars and could end up filing for bankruptcy.

In an email to Twitter staff, the platform’s new CEO said, “The economic picture ahead is dire. He added that he plans to end Twitter’s remote work policy and require employees to come into the office at least 40 hours a week.

These new announcements risk scaring away other employees who have moved to an area with a lower cost of living. With interest rates still rising, now is not a good time to be looking for a new mortgage.

The question of bankruptcy, while it seems unreal for now, is likely to cringe many bankers who have loaned Twitter billions of dollars and planned to offload debt in secondary markets. With soaring interest rates, bankers have already taken a huge hit, even before Elon Musk’s alarming statements. However, according to deal bookinvestors are only offering banks 60 cents on the dollar for Twitter’s debt.

One of the most surprising aspects of Elon Musk’s many financial moves to head Twitter is the news that the billionaire has fired over 90% of staff of the social network in India, where labor is known to be cheap.

Moreover, he authorized several department heads to invite certain dismissed people to return to their jobs, a gesture which came too late for the decimated team which had previously ensured that there was no misinformation concerning the 2022 midterm elections which took place on November 8.

In addition to labor issues, Elon Musk has to deal with the exodus of his main advertisers. The billionaire called a meeting with them last week and tried, unsuccessfully, to get them to adopt Twitter as an advertising platform.

Lou Paskalis, the president of MMA global, tweeted after the meeting: “I think we are witnessing a tale of the two Elons. The Elon I met on Thursday was charming, measured, and seemed to understand the critical role advertisers play in Twitter’s financial reliability. Afterwards, we saw a very changeable and reactive Elon”. Lou Paskalis later discovered that his Twitter account had been blocked after asking a series of pointed questions.

A well-respected tech podcaster, who has 1.4 million followers, tweeted that chief marketing officers halted or changed their budgets during Elon Musk’s call due to the uncertainty.

Advertisers also complain that there is no security cordon in place to protect Tesla advertiser data that reaches the Twitter team. It’s clear that Tesla employees and Twitter employees mix a lot, which only increases the possibility of information leaks.

As if employee and advertiser issues weren’t enough, Elon Musk made changes to Twitter that bypassed its standard data governance processes. This is a practice to be avoided following the settlement reached with the FTC after Twitter was caught using users’ personal information to target ads.

the wall street journal reported Nov. 11 that the FTC is considering expanding its use of a century-old US law allowing it to pursue more lawsuits against companies it believes engage in anti-competitive practices.

A Twitter lawyer is now telling employees who feel uncomfortable about what they’re being asked to do to turn to whistleblowers. The Privacy Officer, Damien Kiernanthe IT security manager, Lea Kissnerand the Compliance Officer, Marianne Fogartyhave all resigned, confirmed The Verge.

An attorney for Twitter’s privacy team wrote on a public Slack page, viewable by all Twitter staff, that “Elon has shown that his only priority with Twitter users is to know how to monetize them. I don’t believe he cares about human rights activists, dissidents, our users in non-monetizable regions, and all the other users who have made Twitter into this global public square that you’ve taken so long to build and that we all love. »

In all likelihood, the lawyer asked for whistleblower protections before posting this inflammatory note. Others are likely to follow suit after Elon Musk’s legal department asked engineers to “certify themselves” that they are in compliance with FTC rules and other laws on the protection of privacy. The FTC’s consent order requires the company to conduct privacy reviews before making changes to the product.

After the publication of the article by The Verge, a spokesperson for the FTC released a statement indicating that the commission “is following recent developments within Twitter with deep concern. No CEO or company is above the law, and companies must abide by our decrees of agreement. Our revised consent order gives us new tools to ensure compliance, and we are ready to use them. »

Article translated from Forbes US – Author: Derek Baine

<<< Also read: Twitter: Elon Musk bans teleworking and warns of “difficult times” in an internal email >>>