AFP, published on Wednesday 21 December 2022 at 22:27.
Twitter “will be fine” next year thanks to the drastic cost-cutting measures Elon Musk has implemented since taking over Twitter, the entrepreneur said Wednesday.
“With the changes we’re making, massively cutting costs and increasing revenue from subscriptions, I think Twitter will be okay next year,” the platform owner told a conference call online on the social network.
Since becoming Twitter’s largest shareholder in late October, Elon Musk has fired about half of the company’s 7,500 employees.
He announced on Tuesday that he planned to hand over management of the company in San Francisco (California) as soon as he “found someone crazy enough” to succeed him.
He thus took into account the result of a poll he launched on Sunday, according to which 57% of the approximately 17 million participating users declared his departure.
The man who also heads Tesla and SpaceX said Wednesday that, according to his forecasts, the social network could achieve revenue of about $3 billion next year.
If this figure is confirmed, it will correspond to a 41% decrease compared to the revenues achieved in 2021.
According to the billionaire, the company would have spent between 6 and 6.5 billion dollars in 2023 if no changes had been made to Twitter’s cost structure.
This sum includes the payment of part of the principal and the interest related to the loans Elon Musk has taken out to buy Twitter, which must now be honored by the group and not by the entrepreneur.
He estimates this payment at about a billion and a half dollars for the next year alone.
The social network thus risked ending the year 2023 with a reduced cash flow of around $3 billion, according to estimates from the new boss.
“It’s not good,” commented Elon Musk, “since Twitter has (currently) a billion dollars in cash.”
If these predictions were to come true, the director and his fellow shareholders would have had to bail out the company, or risk becoming insolvent.
“We would be dead,” he said of such a situation.
“That’s why I’ve spent the last five weeks cutting costs like crazy,” Musk told the conference.
He compared Twitter’s situation upon his arrival to “a plane hurtling towards the ground at full speed with engines on fire and controls not working”.