Should that be taken at face value? The man has repeatedly lied through his teeth, exaggerated, and misled the public for reason ranging from making money selling stock, inflating a meme coin's valuation because the mascot is the same breed of dog that he owns, hyping tech fantasies, up to petty rivalry.
I know that every business leader lies and or stretches truth, but his reputation for outright deception on all levels, especially when it comes to his businesses, is fairly established.
About as much as the word of any billionaire. The issue is we’ll only ever have his word, since Twitter is private, and being honest about financials when poor is bad for business.
I’m willing to believe it’s closer to the truth than not, though. For one cutting out ~5,700 employees, or around ~75% of your work force, is a massive cost reduction. According to Payscale[0] the average salary at Twitter was ~$117,000/yr. A quick calculation shows that annually he shaves off $666.9M (which is hilarious). Alongside decommissioning unneeded offices and removing all the completely unnecessary and expensive time-wasters I can imagine he’s at least saved $1B or more annually.
In true leveraged buyout fashion however, those cost savings are going straight back to the banks that provided Musk with financing. Twitter has paid $600m in two interest payments this calendar year.
Ok let’s assume your numbers are in the ballpark and he’s saving $1b annually on salaries and ancillary expenses.
Problem is he’s also loaded Twitter with significant debt to take it private. Estimated interest payments alone total to over $1.2b annually - so… we are actually losing an additional $200m annually even after firing 75% of the staff.
He's said in a Twitter spaces that he's reduced the expenditures down to basically the interest payment and another billion and a half on top of that. A large part of the reduction was shutting down a lot of the unused servers.
So 2.5 billion in expenses. In 2021 Twitter had Revenue of 5 Billion. So obviously they have lost a lot of revenue, as Elon himself has admitted. But between the cuts they are close to breakeven.
Now with a new CEO who is much more advertiser friendly they are going to get a lot more advertisers back. She will be the new face of the company. Then, likely they will start paying down that debt. Each time they do their burden will be less.
Tesla is the most profitable car company per car. Musk isn't going to have a problem making Twitter profitable, though he put himself behind the 8 ball.
Way behind the eight ball. He managed to take an already toxic platform and make it worse (somehow). When I visit it, not logged in, all I see are promoted Musk tweets and stupid memes totally unrelated to the content I just viewed. Makes it entirely unpalatable for me.
As they say, at least it’s not rocket science. Except in this case apparently running a social media site is actually more difficult than rocket science.
