Elon Musk’s Cost-Cutting Measures at Twitter: Unpaid Bills, Lawsuits, and Short-Term Thinking
According to a report from the Financial Times on Friday, Elon Musk, the CEO of Tesla and SpaceX, has been repeatedly quoted as saying “let them sue” in relation to unpaid bills by Twitter’s vendors, which have reportedly accumulated since his $44 billion takeover of the company. In November, Musk established a “transition team” made up of trusted associates whose job was to reduce costs. However, according to the report, the team refused to compensate Twitter’s vendors, partners, and landlords to keep costs low.
The FT quoted a former senior employee who was laid off in the most recent round of cuts as saying, “Elon would always say ‘Let them sue,’ it was a constant refrain. It’s all very short-term thinking.” The transition team is said to be led by Steve Davis, the CEO of Boring Company, who has cut nearly $1 billion in costs at Musk’s request.
Read Also
Musk is reportedly working with investors to address the situation with the unpaid vendors, who include landlords, insurance providers, limo services, fertility providers, and companies such as Salesforce, Adobe, and Slack. Pablo Mendoza, a managing director at Vy Capital, which funded $700 million of Musk’s Twitter takeover, is said to have helped negotiate some bills down by as much as 90%, sometimes using emotional appeals to the vendors.
The report says that Twitter has not yet responded to requests for comments about the report. Musk has said that he had to “save Twitter from bankruptcy” and has been taking drastic cost-cutting measures, such as laying off more than half the company’s staff, not paying rent for offices, auctioning off Twitter merchandise, and getting rid of employee perks like free lunches. At least nine lawsuits have been filed against Twitter claiming more than $14 million plus interest for unpaid bills, including a lawsuit by Canary LLC, a marketing agency suing Twitter for almost $400,000 for unpaid merchandise.
Author Of Solvefinancewithca.com
Hi, my name is Sandeep Mittal and I have been working as a Chartered Accountant in the finance industry for the last 5 years. With my experience, I have gained knowledge about various aspects of finance, such as financial planning, investment strategies, taxation, and accounting.
I am passionate about finance and I want to help people achieve their financial goals. So, I have started a blog called “Solvefinancewithca”. Through this blog, I will share practical advice on finance-related topics like personal finance management, investment planning, tax planning, and accounting best practices.
My goal is to provide solutions to common finance-related problems that people face in their daily lives. I want to make finance easy to understand for everyone and provide honest and impartial advice that is tailored to the needs of my readers.
In summary, my blog “Solvefinancewithca” is about sharing my passion for finance and helping people make informed decisions about their finances.
