Twitter owner and CEO Elon Musk has claimed that the social media platform is set to lose $3 billion in the upcoming financial year, as he continues to defend his cutbacks and sweeping company changes.
Ever since Elon Musk acquired Twitter, the social media platform has been mired in controversy.
From sweeping layoffs to unpopular policy changes, Musk’s time in charge has been a huge discussion topic online.
While he looks set to step down as CEO after being voted out in a public poll, he continues to defend and explain his policy and staff changes.
Specifically, he revealed the company’s dire financial situation in a recent Twitter Spaces call, explaining that without major changes it would likely collapse financially.
Elon Musk claims Twitter will lose $3 billion without major changes
In the Spaces call, shared by @TheSonofWalkley on Twitter, Musk revealed that the platform was on course to lose $3 billion in the calendar year, due to the rising cost of servicing debt with increased interest rates.
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The monumental financial worries are the reason for his extreme cost-cutting tactics.
“Because of the nature of this transaction,” he explained, “where there’s $12.5 billion of debt and the debt rate has been going crazy… So that’s like a negative cash flow situation of like $3 billion a year. That’s not good, [especially] since Twitter has $1 billion in cash. So that’s why I’ve spent the last five weeks cutting costs like crazy.”
Key moment in this twitter space with @elonmusk – in this clip he explains the current financial situation at @twitter and the reason for his actions lately. pic.twitter.com/YyWZEy5VS7
— TheSonOfWalkley (@TheSonOfWalkley) December 21, 2022
He went on to explain that they are looking to increase Twitter’s revenue via new subscription models and advertiser improvements. As a result, he reckons the platform will be “okay” financially.
“I now think that Twitter will in fact be okay next year,” he stated. “I think we will be sort of roughly cash flow break even. That’s what I hope for next year… as opposed to minus $3 billion ish… [My actions] may seem sometimes spurious or odd. It’s because we have an emergency fire drill on our hands, not because I’m naturally capricious.”
Despite Musk’s adamant defense of his policy, discussion over the platform’s direction is sure to drag on.