(Reuters) – Twitter’s new owner Elon Musk hinted on Wednesday that the social media platform could go bankrupt, prompting warnings from U.S. privacy regulators and the company’s trust and safety leader. It ended a chaotic day, including the resignation of
Bloomberg News reported that the billionaire said in his first mass conference call with his employees that bankruptcy could not be ruled out. The $44 billion acquisition put Twitter in a financially precarious situation, credit experts say.
Earlier in the day, Musk said in his first company-wide email that if Twitter can’t increase subscription revenue to offset declining advertising revenue, Twitter will “never survive the coming recession.” Reuters
Yoel Roth, who oversaw Twitter’s response to fighting hate speech, hoaxes and spam, resigned on Thursday, two people familiar with the matter told Reuters.
In his Twitter profile on Thursday, Roth described himself as the company’s “former head of trust and safety.”
Mr. Ross did not respond to a request for comment. Bloomberg and tech site Platformer were the first to report his departure.
Earlier Thursday, Twitter chief information security officer Lea Kissner tweeted that she was leaving the company.
Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogerty also resigned. According to an internal message posted on Twitter’s messaging system Slack on Thursday by a lawyer for the privacy team, seen by Reuters.
Robin Wheeler, the company’s top advertising sales executive, sent a memo to employees telling them she was staying with the company.
“I’m still here,” Wheeler tweeted late Thursday.
The U.S. Federal Trade Commission said it was watching Twitter with “deep concern” after three privacy and compliance officers resigned. These resignations could put Twitter at risk of violating regulatory orders.
Musk attorney Alex Spiro said in an email to some employees late Thursday that Twitter will remain compliant.
“We are in a constructive ongoing dialogue with the FTC today, talking about our ongoing obligations,” Spiro wrote.
He said only Twitter, not individual employees, can be held accountable for orders.
“I understand that Twitter employees who do not address FTC issues have commented that they could go to jail if we do not comply.
In his first meeting with many of Twitter’s employees on Thursday afternoon, Musk warned that the company could lose billions of dollars next year, The Information reported.
In an email to employees, Musk added that remote work will no longer be allowed and that employees are expected to be in the office at least 40 hours a week.
Twitter, Musk and Spiro did not respond to requests for comment regarding possible bankruptcy, FTC warnings, or exits.
Musk has been cleaning the house relentlessly since taking office on Oct. 27, and the company is losing more than $4 million a day, largely because advertisers fled when he took office. said.
Following the transaction, Twitter is $13 billion in debt and faces nearly $1.2 billion in total interest payments over the next 12 months. The payment topped his $1.1 billion in cash flow as of the end of June, which Twitter recently announced.
Musk has started charging $8 per month for its Twitter Blue service, which includes bluecheck verification.
Douglas Farrar, director of public affairs for the FTC, told Reuters, “We are following the latest activity on Twitter with great concern.
“CEOs and businesses are not above the law and businesses must comply with our consent orders. Our revised consent orders give us new tools to ensure compliance. us and we are ready to use them,” said Farrar.
In May, Twitter issued $100 million to settle a claim by the FTC after it misused personal information, such as phone numbers, to serve ads to its users and said the information was only collected for security reasons. I agreed to pay $50 million.
Twitter’s privacy attorney noted in an internal memo Thursday that Spiro said Musk was willing to take “huge risks” to the company. “Elon launches rockets into space. He’s not afraid of his FTC,” the lawyer quoted his Spiro as saying.
The Twitter acquisition has raised concerns that Musk, who has often trotted into political debates, could face pressure from countries seeking to regulate online speech.
US President Joe Biden said Wednesday that Musk’s “cooperation and/or technical relationships with other countries are notable.”
Advertisers don’t feel safe
Musk told advertisers about Twitter’s Spaces feature on Wednesday, saying it aims to turn the platform into a force of truth and thwart fake accounts.
His assurance may not be enough.
Chipotle Mexican Grill (CMG.N) said on Thursday it was pulling back on Twitter’s paid and owned content “while learning more about the platform’s direction under new leadership.”
Other brands, such as General Motors (GM.N), have also suspended advertising on Twitter since Mr. Musk took office over fears that he would loosen content moderation rules.
Reporting by Katie Paul of Palo Alto, CA and Paresh Dave of Oakland, CA. Additional reporting by Jeffrey Dastin of Palo Alto, Diane Bartz of Washington, Yuvraj Malik of Bangalore, Fanny Potkin and Hyunjoo Jin. Written by Sayantani Ghosh. Edited by Shounak Dasgupta, Bill Berkrot, Deepa Babington, Sam Holmes
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