The billionaire in his first public chat with employees said he could not rule out bankruptcy, Bloomberg News reported, two weeks after buying it for $44 billion — a deal that credit experts say has put Twitter’s finances in a precarious position . Earlier in the day, in his first company-wide email, Musk warned that Twitter won’t be able to “survive the coming economic downturn” if it can’t boost subscription revenue to offset declining revenue from ads, 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 Thursday, Roth described himself as “Former Head of Trust & Security” at the company. Roth did not respond to requests for comment. Bloomberg and technology website Platformer first reported his exit. Earlier Thursday, Twitter’s Chief Information Security Officer Lea Kissner tweeted that she was resigning. Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogarty also resigned, according to an internal message posted on Twitter’s Slack messaging system on Thursday by a lawyer for its privacy team and seen by Reuters. Robin Wheeler, the company’s top ad sales executive, told employees in a memo that she was staying at the company, a person who had seen the message said, diverging from earlier media reports that she too would be leaving. “I’m still here,” Wheeler tweeted late Thursday. The US Federal Trade Commission said it was monitoring Twitter with “deep concern” following the resignation of three privacy and compliance officers. These waivers potentially put Twitter at risk of violating regulatory orders. Musk’s lawyer Alex Spiro told some employees in an email late Thursday that Twitter would remain in compliance. “We spoke with the FTC today about our ongoing obligations and have a constructive ongoing dialogue,” Spiro wrote. He said only Twitter, not individual employees, could be held liable against the orders. “I understand there have been employees at Twitter who don’t even work on the FTC matter who have commented that they could (go) to jail if we didn’t comply — it just doesn’t work that way,” he wrote. The Twitter app is seen on a smartphone in this picture taken July 13, 2021. REUTERS/Dado Ruvic/Illustration//File Photo In his first meeting with several Twitter employees on Thursday afternoon, Musk warned that the company could lose billions of dollars next year, The Information reported. Musk added in the email to employees that remote work will no longer be allowed and that they will wait at the office for at least 40 hours a week. Twitter, Musk and Spiro did not respond to requests for comment about a potential bankruptcy, the FTC warning or the exits. Musk moved ruthlessly to clean house after taking over on Oct. 27 and has said the company was losing more than $4 million a day, largely because advertisers started leaving when he took over. Twitter has $13 billion in debt after the deal and faces nearly $1.2 billion in interest payments over the next 12 months. The payouts exceed Twitter’s most recent cash flow, which totaled $1.1 billion at the end of June. Musk has started charging $8 a month for the Twitter Blue service which will include blue check verification.
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“We are following the recent developments on Twitter with deep concern,” Douglas Farrar, director of public affairs for the FTC, told Reuters. “No CEO or company is above the law, and companies must follow our consent decrees. The revised consent order gives us new tools to ensure compliance, and we stand ready to use them,” Farrar said. In May, Twitter agreed to pay $150 million to settle allegations by the FTC that it misused personal information, such as phone numbers, to target ads to users after telling them the information was collected only for security purposes. Twitter’s privacy lawyer on Thursday said in the internal memo that Spiro had said Musk was willing to take a “huge risk” with the company. “Elon puts rockets into space, he’s not afraid of the FTC,” the lawyer quoted Spyro as saying. The acquisition of Twitter has sparked concerns that Musk, who often wades into political debates, could face pressure from countries trying to control speech online. That prompted US President Joe Biden to say on Wednesday that Musk’s “collaboration and/or technical relationships with other countries are worth looking into.”
ADVERTISERS WERE NOT CHARGED
Musk told advertisers on Wednesday, speaking at Twitter’s Spaces feature, that he aimed to make the platform a force for truth and stop fake accounts. His assurances may not be enough. Chipotle Mexican Grill ( CMG.N ) said on Thursday it was pulling its paid and owned content on Twitter “while we gain a better understanding of the direction of the platform under its new leadership.” He joined other brands including General Motors ( GM.N ) that have halted ads on Twitter since Musk took over, worried he would loosen content control rules. Reporting by Katie Paul in Palo Alto, California and Paresh Dave in Oakland, California. Additional reporting by Jeffrey Dustin in Palo Alto, Diane Bartz in Washington, Yuvraj Malik in Bengaluru, and Fanny Potkin and Hyunjoo Jin. Sayantani Ghosh writes. Editing by Shounak Dasgupta, Bill Berkrot, Deepa Babington and Sam Holmes Our Standards: The Thomson Reuters Trust Principles. Paresh Dave Thomson Reuters Technology reporter based in the San Francisco Bay Area covering Google and the rest of Alphabet Inc. He joined Reuters in 2017 after four years at the Los Angeles Times focusing on the local technology industry.
