Report: Musk Told Banks He Would Cut Jobs, Pay at Twitter

Sources say he also discussed plans to boost revenue
By Rob Quinn,  Newser Staff
Posted Apr 29, 2022 9:20 AM CDT
Report: Musk Told Banks He Would Cut Jobs, Pay at Twitter
Elon Musk attends the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany last month.   (Patrick Pleul/Pool Photo via AP, File)

Elon Musk has said he wants to buy Twitter to preserve free speech—but in talks with banks to secure funding for the deal, he made it clear that he plans to make it a profitable crusade. Sources tell Bloomberg that Musk told bankers he would focus on the company's bottom line and would look into money-saving measures including cutting jobs and reducing executive pay. According to Reuters' sources, Musk also discussed new ways for Twitter to make money, including charging fees for third-party websites to embed tweets, though the pitch "constituted his vision rather than firm commitments."

Musk also discussed ideas for subscription services and paying influencers to create content, insiders tell the Washington Post. Musk—who claimed in a TED talk earlier this month that he didn't "care about the economics at all"—reportedly told the bankers this his experience at SpaceX and Tesla shows his ability to generate economic returns. A source tells Bloomberg that Musk didn't discuss his plans for job cuts or ideas for generative revenue when he presented his proposal to Twitter's board.

Musk is funding the $44 billion deal with his own cash, plus $13 billion in loans secured against Twitter and a $12.5 billion loan tied to his Tesla stock. Sources tell Reuters that some banks decided at seven times the company's annual earnings, the loan tied to Twitter was too risky, partly because the Musk buy could lead to an "exodus of talent." Some analysts predict that complications, including a sharp drop in Tesla's share price, might cause Musk to walk away from the deal, which would cost him a $1 billion "break fee" included in the contract, the Los Angeles Times reports. Twitter is currently trading at around 10% below Musk's $54.20 per share offer price. (More Elon Musk stories.)

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