Elon Musk said Twitter was previously on track to spend $5 billion (nearly Rs. 41,440 crore) next year.
Elon Musk said Twitter is now on track to be “roughly cash flow break-even” next year, as the billionaire owner defended his deep cost-cutting measures at the social media platform.
Twitter was previously tracking toward a “negative cash flow situation of $3 billion (nearly Rs. 24, 870 crore) per year” before the cost cuts, Musk said on Wednesday while speaking in a Twitter Spaces audio chat.
Since taking over Twitter on October 27, Musk has laid off 50 percent of the company’s employees and demanded remaining staff commit to long hours and a “hardcore” culture, prompting more employee departures. The controversial moves have rattled advertisers, who contribute 90 percent of Twitter’s revenue.
“We have an emergency fire drill on our hands,” Musk said. “That’s the reason for my actions.”
Musk said Twitter was previously on track to spend $5 billion (nearly Rs. 41,440 crore) next year. With $12.5 billion (nearly Rs. 1,03,600 crore) in debt due to the acquisition, Twitter was facing a net cash outflow of $6.5 billion (nearly Rs. 53,890 crore) with revenue of about $3 billion next year. That amounted to negative cash flow of $3 billion, Musk said.
During the Spaces session, Musk said his “number one priority” was to grow subscriber revenue so it becomes a meaningful part of Twitter’s business, at a time when companies are cutting their advertising budgets in a weak economy.
Twitter currently has a little over 2,000 employees, Musk added.
Meanwhile, Musk also said Tuesday that he would resign as chief executive of Twitter once he finds a replacement. His reply came as apparent response to a poll he launched that suggested users wanted him to step down.
“I will resign as CEO as soon as I find someone foolish enough to take the job!” Musk tweeted, saying he will then only run software and server teams at Twitter.