Elon Musk confirmed that staff were being let go at Twitter because the company is losing $4 million a day.
After acquiring Twitter for $44 billion, the entrepreneur started to take quick measures to overhaul the social media company, and reduce its operating costs.
Twitter’s precarious position and financial viability has made it more urgent for Musk to look at ways of reducing costs while building a sustainable revenue stream for the platform. Recently, Musk floated the idea of an $8 a month subscription feature for Twitter Blue, which would enable users to get a verification blue tick. The reaction to the suggested premium tier subscription has been met with a mixed response – however could prove lucrative as Twitter is estimated to have over 400k verified accounts.
On Friday, Twitter staff that had lost their jobs thanked their co-workers and supporters via their personal handles on the platform.
Twitter is not the only tech company to be affected by a slowdown in advertising spend. Competitors including Meta have seen their share prices tumble since the start of the year. Snapchat has also struggled with slowing ad revenue, as U.S. inflation continues to erode purchasing power.
Following the Federal Reserve’s latest interest rates hike, companies are slashing workforces to prepare for a more turbulent economic environment in the coming months ahead.