Twitter tries to call employees as a deal with Elon Musk

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By georgeskef

The $44 billion deal Mr. Musk made to purchase Twitter is expected to close by Oct. 28. This is a way for the company to reassure employees about their jobs and their compensation.

Twitter is trying to calm employees’ fears about Elon Musk’s imminent takeover of the company. This raises concerns about a seismic overhaul of the social media service. But its assurances may not go far enough.

The $44 Billion acquisition of Twitter by Mr. Musk has been a source of tension for the 7,500 employees. Musk made promises about the future of Twitter and then attempted to cancel the deal. The company is now in turmoil as Musk’s takeover has been rescheduled to close by next Friday.

On Thursday, The Washington Post reported Mr. Musk’s plans to reduce Twitter’s staff by up to 75 percent over the next few months. This would bring down its workforce to just over 2,000. Five employees, who weren’t authorized to speak publicly, expressed concern about how compensation will change if Mr. Musk makes the company a privately owned one.

Twitter attempted to calm some concerns late on Thursday. Sean Edgett, the general counsel, stated that there are no plans to lay off employees in a memo he sent out to employees following the report on job cuts.

He wrote that “we do not have any confirmation about the buyer’s plans after close” and advised not to follow rumors or leak documents but to wait for the facts from him and the buyer. Bloomberg reported the memo earlier.

It may not suffice to do what Twitter does to reassure employees. After Mr. Musk, the family mercurial entrepreneur has signed the agreement for the company he will be able to do anything he wants with the firm. He has also indicated that he intends to make major changes.

Musk stated that he supports more freedom of speech on Twitter and will allow former President Donald J. Trump to resume tweeting. He also stated that he will add more subscription services and reduce some jobs while encouraging more people to use the service.

The deal seemed to be moving towards the end as of Friday. According to a source familiar with the matter, the $12.5 billion commitments by the investment banks to Mr. Musk’s takeover are being finalized ahead of the Oct. 28 deadline. The person stated that Mr. Musk’s advisors have also shared their financial analysis with investors.

After the deal closes, Musk will likely run Twitter with a tight budget. He also manages the electric carmaker Tesla as well as the rocket company SpaceX. This means that he will have to repay a lot of money. Investors who have contributed more than $7 billion to the purchase will eventually see returns.

Musk is currently paying $54.20 per share for Twitter. He has made it clear that he believes he is overpaying for the company, as its stock price has tumbled in recent months. During an earnings call to discuss Tesla’s quarterly results, Musk stated that “Obviously, me and other investors overpay for Twitter right now.”

A spokesperson for Mr. Musk’s legal staff declined to comment. Twitter declined to comment.

Since Mr. Musk became the largest shareholder in 2013, employees at Twitter have been living on the edge. The state of Twitter’s business has made it difficult to believe that Musk is still in control.

Two people familiar with the plans stated that Twitter was considering cost-cutting measures early this year. These included not replacing employees who had left due to attrition or small rounds of layoffs. Twitter has been aggressively cutting costs in recent months by freezing employment for most jobs and reducing its real property.

Five employees also expressed concern that Musk may not continue to pay workers the same compensation as they had requested. According to the agreement, Musk agreed that he would continue to pay Twitter employees the same salaries and benefits for a year. Their equity compensation will be modified.

Twitter employees receive shares of the company regularly, based on their employment agreements. These shares will be replaced by cash, as Musk plans to privatize the company and Twitter stock is set to go delisted. Employee shares that have been earned will be paid at the same price Mr. Musk agreed for Twitter.

Some employees expressed concern that Musk would not honor the agreement, considering how many times he has changed his mind about it. Three people familiar with the matter stated that Twitter created an internal document to address questions regarding how Mr. Musk might change his equity compensation.

Three people familiar with the conversation said that workers tried to help each other on Slack to discuss how to manage their finances during the merger process. They were advised to save their equity contracts in case Musk attempts to delete or modify them.

Three employees claimed that Twitter employees have been irritated by the uncertainty surrounding pay. If Mr. Musk fires top executives, they will be awarded golden parachutes worth millions.

Parag Agrawal is Twitter’s chief executive. He will receive more than $60million in stock and cash if Mr. Musk fires them. Other top executives could earn more than $20 million. Twitter management responded to employee questions regarding executive payouts. They stated that such payments are routine in acquisitions.

Some employees of Twitter stated that they hoped to be at least employed until Nov. 1, when many will receive their next equity grant, a tranche of stock or cash.

Others employees laughed at the idea of being laid off and joked about how few people would remain working for the company after Mr. Musk assumed control.

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