On Friday, Elon Musk admitted that Twitter has been “massive drop in revenue” after several advertisers halted their spending on the program following his $44 billion acquisition.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation, and we did everything we could to appease the activists,” Musk tweeted. “Extremely messed up! They’re trying to destroy free speech in America.”
Companies such as General Mills and Volkswagen made the decision to pause advertising on Twitter until they have a clearer idea of their direction under Musk’s stewardship.
“We have paused advertising on Twitter,” Kelsey Roemhildt, who is a spokesperson for General Mills, told CNN in a statement. “As always, we will continue to monitor this new direction and evaluate our marketing spend,” Roemhildt went on to say.
In a separate statement, Volkswagen Group, who own Audi, Porsche and Bentley, confirmed it had recommended its brands “pause their paid activities on the platform until further notice.”
General Motors said they would wait and see what Twitter’s “new direction” is before re-commencing with their advertising, and Toyota have confirmed that it is “in discussions with key stakeholders and monitoring the situation.”
Musk has already put in place measures to combat Twitter’s financial blackhole. He has stated his plans to roll out “Twitter Blue” which is paid subscription model that will charge users $8 per month for account verification and along with other perks.
Many verified users, including author Stephen King, have complained about a potential fee for having a “blue check” on their profile.
Musk defended the move, saying that he has to pay the bills and that Twitter cannot solely rely on advertisements.
“We need to pay the bills somehow! Twitter cannot rely entirely on advertisers,” Musk said at the time.
Musk has also announced that redundancies will be required to trim the wage bill, however he said in a tweet that those leaving will be treated fairly.
“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required.”
Due to the sudden layoffs, Musk is now facing a class action lawsuit claiming that he violated the WARN (Worker Adjustment and Retraining Notification) Act for his alleged failure to give employees 60 days’ notice of their dismissal.
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