Elon Musk hints Twitter may face bankruptcy as top figures quit

The billionaire Tesla owner, who took over the social media platform in late October, warned it would not “survive the upcoming economic downturn” without boosting revenue.

Musk launched a cull of Twitter’s workforce last week, with as many as 3,700 redundancies expected in its offices worldwide.

In a call to its remaining staff on Thursday, Musk said the company may lose billions next year and that “bankruptcy isn’t out of the question”, reports suggested.

It comes after Musk, who bought the platform for $44bn (£39bn), said the cuts were a result of a dramatic drop in ad revenue, causing, he said the company to lose $4mn a day. Advertising accounts for 90% of Twitter’s revenue.

A number of firms paused advertisements on Twitter following his takeover, amid concerns Musk will scale back misinformation and security protections.

Musk himself appeared to brush off reports of bankruptcy tweeting: "Usage of Twitter continues to rise. One thing is for sure: it isn’t boring!"

Among those to have left is Yoel Roth, the head of safety and integrity. In the last week, Roth has been trying to quash the concerns of advertisers and users about the changes at Twitter.

Three top security officials have also resigned on Friday; chief information security officer Lea Kissner, chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty.

It comes as Twitter faces a class action lawsuit from former employees who say they were not given enough notice under US federal law.

In the UK, business secretary Grant Shapps wrote to the company to remind them to comply with UK law.

Employers are required to launch a consultation period if they plan to make more than 20 redundancies, as well as consulting individuals.

There were many reports of Twitter staff learning they were fired after finding themselves locked out of laptops and work accounts.

According to a report in the Guardian, Shapps has written to Musk after the Prospect Union , which represents technology workers, outlined concerns for their members

In a dramatic week for Twitter, Musk also effectively banned remote work at Twitter, omitting exceptional cases.

Mike Tremeer, Employment Partner at Fladgate said: “Mr Musk has certainly made an impression on Twitter in his first three weeks – making up to half of the employees redundant (including most of the senior management team as far as I can tell) and telling those that remain that they can no longer work from home (save in exceptional cases). 

“I would expect either of those actions separately to have a materially detrimental effect on staff morale, loyalty and commitment – especially given the recent commentary regarding ‘quiet quitting’ or work to rule. Together they are likely to have an exponential effect on the Twitter workforce.

“Mr Musk has even mentioned bankruptcy as a possibility or explanation for his actions which I am sure will not have provided any reassurance to employees at all.”