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Saturday, June 22, 2024

As Elon Musk Walks, Twitter Workers Say No One's in Charge

Elon Musk’s July 8 decision to unilaterally pull out of the $44 billion acquisition of Twitter may have fallen afoul of the terms of his takeover agreement and baffled the general public. It also caused chaos within Twitter’s ranks.

“Twitter is a shit show internally; I can confirm that for you right now, without a doubt,” says one Twitter employee, speaking on condition of anonymity because they aren’t authorized to talk to the media.

They are far from alone in this view. “There’s no strong leadership at the moment,” says a second current Twitter staffer, also speaking anonymously. “The entire company is running on autopilot.” A third, who is set to leave the company, is equally exasperated. “I expect it is going to be a mess,” they say. “I’d like to see someone hold Elon’s feet to the fire because I think it sets a risky precedent to allow him to meddle so much, drive down the stock, then pull out.”

Twitter staff have been told not to speak publicly on their own platform about the takeover—and say they are being kept in the dark. “We’ve been told nothing by senior management,” says the first employee. Internal communications about the latest developments have been limited to a message pointing users to a tweet by company chair Bret Taylor, who said the Twitter board is “committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement.”

Employees have been asked not to add their own comments about what is going on at the company. “Every time I find out something about Twitter, I find out on Twitter,” says the first employee. “I found out about the Musk news via friends, not through my own company—which has been a consistent issue from the beginning.” Twitter declined to comment.

The mess looks likely to end up in court. Twitter has hired Delaware litigation law firm Wachtell Lipton to make sure Musk holds up his end of the deal. At the time of his tweet, Taylor said he was “confident” the company would prevail. Former Twitter CEO and chair Evan Williams has said he thinks that Twitter should cut ties and “let this whole ugly episode blow over."

“For Twitter, this fiasco is a nightmare scenario and will result in an Everest-like uphill climb for Parag [Agrawal, Twitter’s CEO] and Co. to navigate the myriad of challenges ahead,” says Dan Ives, managing director at Wedbush Securities, a New York analyst firm. Among the challenges Twitter faces are employee turnover and low morale, issues around advertising headwinds, a loss of credibility with investors because of the yo-yoing share price, and damaging claims about fake accounts on the platform.

The court case, if it does take place, is likely to drag on and be ugly, Ives says—casting “a dark cloud over Twitter's head in the near term.” The company’s reputation has taken successive hits, and Twitter faces questions about its ability to accurately report the number of bots on the platform, its monetizable user base, and its leadership. It’s a weakness Musk is all too aware of, and has highlighted publicly, mocking Agrawal in successive tweets that puncture long, seemingly vetted statements about Twitter’s bot capabilities. But Musk himself has caused problems with his plans for the firm, particularly around free speech, says Prateek Waghre, policy director at the Internet Freedom Foundation. “I think that would have created uncertainty once the acquisition went through around Musk's position on that, along with uncertainty on many other things,” he says.

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A number of executives have already left the company in the wake of Musk launching his takeover bid, impacting countless others further down the food chain. “The feeling internally is that people have been applying for jobs, and they’re going to keep applying for jobs,” says the first Twitter staffer.

Employees say they felt particularly aggrieved by a lack of management support when a number of staff were caught up in stings by Project Veritas designed to catch them publicly saying negative things about their potential new boss. “I joined Twitter and wanted to stay,” says the first employee. “I liked my job. Nothing would keep me here now—even if they returned to exactly what they were.”

The brain drain is likely to continue, with current employees worried about Twitter rescinding job offers to applicants and the impact that’s likely to have on who applies in the future. One job applicant who was offered a position at Twitter this year, only to have it rescinded during the takeover, says they would apply again to the company, but not before asking the manager they’d end up reporting to about internal politics and plans for the future.

Others aren’t as sure that the reputational risks to Twitter are as great as those inside the company fear. “The real worry was he would democratize it too much and allow people to say things that would be inappropriate on it,” says Cary Cooper, a business professor at Manchester Business School. “Shareholders would be worried because he has commercial nous.” 

However, Cooper does think the investor impact could be more significant. “There is a downside, I think, because [Musk] would have thought about it as a commercial business acquisition, as well as a platform,” he says. Cooper believes Twitter’s senior leadership team will have to step up to the plate in Musk’s absence and introduce a new business plan to revitalize the company.

But there’s little indication that’s likely to happen, says Debra Aho Williamson, principal at market analysis firm Insider Intelligence. “The past few months have been a huge distraction for Twitter, keeping it from focusing on its business fundamentals,” she says. “If Musk is able to terminate the deal, Twitter will still be left with the same problems it had before he came on the scene. Its user growth is slowing. And while ad revenue is still growing marginally, Twitter is now dealing with a slowing economy that could squeeze ad spending on all social platforms.”

There’s also the question of staffing. The pileup of issues is a concern likely to prey on the minds of Twitter’s investors. The Vanguard Group, Morgan Stanley, BlackRock, Kingdom Holding Group, and State Street did not respond to questions about whether they felt Twitter should fight Musk in court or let the deal peter out. Ives believes that investors would prefer a Musk-free future for Twitter, with Agrawal leading the company and recouping punitive damages from Musk. Legal experts believe Musk will have to pay a significant amount  if he doesn’t end up buying the company. For employees, it almost doesn’t matter. “I can’t imagine what it’s going to even be like in five years,” says the first Twitter employee. “But I know that nobody I know is going to be here.”

What route those investors decide on could be crucial to the next few months—and to whether Twitter can recover from the damaging events of the past three months. Twitter’s share price has been swinging wildly since Musk’s involvement in the company was first announced on April 4, when he declared a 9 percent stake in the firm. The price rose 27 percent on the day his stake was announced, to $49.97. It then peaked at $51.70 on April 25, when Twitter’s board accepted Musk’s offer, before cratering as Musk began detailing the litany of issues he had with the platform and finding reasons to pull out of the deal.

Today, Twitter’s share price opened at $34.64, 12 percent below its value immediately before Musk became intertwined with the company. It has dropped further since. “Musk basically fucked around with us, fucked with the share price, catalyzed a load of redundancies and cuts,” the first Twitter employee tells WIRED. “The morale is so fucking low that nobody wants to be here now anyway.”

Additional reporting by Vittoria Elliott

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