January 31, 2023

Filipino Guardian

Sentinels of Filipino Free Press

Musk warns of Twitter bankruptcy as more execs quit

REUTERS

Twitter Inc.’s new owner Elon Musk raised the possibility of the social media platform’s bankruptcy on Thursday, capping a chaotic day that included a warning from a US data protection agency and the exit of the company’s trust and safety leader .

The billionaire said he couldn’t rule out bankruptcy in his first mass meeting with employees, Bloomberg News reported, two weeks after buying it for $44 billion – a deal that credit experts say will throw Twitter’s finances into a put in a precarious position.

Earlier in the day, in his first company-wide email, Mr. Musk warned that Twitter “would not be able to survive the coming economic downturn” unless it manages to grow subscription revenue to offset falling advertising revenue, three people who saw the message said Reuters.

Yoel Roth, who has overseen Twitter’s response to combating hate speech, misinformation and spam on the service, resigned on Thursday, two people familiar with the matter told Reuters.

On his Twitter profile on Thursday, Mr Roth described himself as the company’s “former Head of Trust & Safety”.

Mr Roth did not respond to requests for comment. Bloomberg and tech site Platformer were the first to report his exit.

Lea Kissner, Twitter’s chief information security officer, tweeted earlier Thursday that she had quit.

Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogarty also resigned, according to an internal message posted to Twitter’s Slack messaging system by a lawyer for the privacy team on Thursday and viewed by Reuters.

Robin Wheeler, the company’s top advertising sales manager, sent a memo to telling employees she was staying with the company, a person who saw the news said, and contrary to previous media reports, that she too would be leaving.

“I’m still here,” Ms. Wheeler tweeted late Thursday night.

The US Federal Trade Commission said it was monitoring Twitter with “deep concern” after the three privacy and compliance officers resigned. These resignations potentially put Twitter at risk of violating government orders.

Mr Musk’s attorney, Alex Spiro, told some employees in an email late Thursday that Twitter would comply with the regulations.

“We discussed our ongoing commitments with the FTC today and have a constructive ongoing dialogue,” Mr. Spiro wrote.

He explained that only Twitter, not individual employees, could be held liable for the orders.

“I understand that there have been staff at Twitter who aren’t even working on the FTC matter and commented that if we don’t comply they could go to jail – it just doesn’t work that way,” he wrote.

In his first meeting with many employees at Twitter on Thursday afternoon, Mr Musk warned that the company could lose billions of dollars over the next year, the information reported.

Mr Musk added in the email to workers that remote work is no longer allowed and they are expected to be in the office at least 40 hours a week.

Twitter, Mr Musk and Mr Spiro did not respond to requests for comment on a possible bankruptcy, the FTC warning or the departures.

Mr Musk ruthlessly moved to a clean house after his Oct. 27 takeover and said the company is losing more than $4 million a day, mostly because advertisers began fleeing after his takeover.

Twitter is $13 billion in debt after the deal and will have to make nearly $1.2 billion in interest payments over the next 12 months. The payments exceed Twitter’s most recently reported cash flow, which totaled $1.1 billion at the end of June.

Mr. Musk has started charging $8 a month for the Twitter Blue service, which will include Blue Check verification.

WARNING

“We are following recent developments on Twitter with great concern,” Douglas Farrar, the FTC’s director of public affairs, told Reuters.

“No CEO or company is above the law, and companies must follow our consent regulations. Our revised Consent Order gives us new tools to ensure compliance and we stand ready to use them,” Mr Farrar said.

In May, Twitter agreed to pay $150 million to settle allegations by the FTC that it misused private information, such as phone numbers, to target users with advertisements after telling them the information was only being collected for security reasons .

Twitter’s privacy advocate mentioned in the internal memo on Thursday that Mr Spiro had said Mr Musk was willing to take a “big risk” with the company. “Elon sends rockets into space, he’s not afraid of the FTC,” the attorney quoted Mr Spiro as saying.

The Twitter takeover has raised concerns that Mr Musk, who has often meddled in political debates, could face pressure from countries trying to control online speech.

That prompted US President Joseph R. Biden Jr. to say on Wednesday that Mr. Musk’s “cooperation and/or technical ties with other countries are worth examining.”

ADVERTISERS NOT CALMED

Mr Musk told advertisers on Twitter’s Spaces feature on Wednesday that he aims to transform the platform into a force for truth and stop fake accounts.

His assurances may not be enough.

Chipotle Mexican Grill said Thursday it had withdrawn its paid and owned content on Twitter “as we gain a better understanding of the platform’s direction under its new leadership.”

It joined other brands, including General Motors, which have paused advertising on Twitter since Mr Musk took over amid concerns he will relax rules on content moderation. – Reuters