Nov 07, 2022
Will Twitter Go Under?
Ryunsu Sung
It’s been about a week since Elon Musk acquired Twitter for $44 billion (around 61.6 trillion won) and became its owner.
He kicked off the week by laying off roughly 4,000 employees, about 50% of the workforce. The cuts spanned widely, from the communications department to the machine learning research team, bringing Twitter’s total headcount back down to around its 2017 level.
He has also replaced the entire leadership team (C-suite and VP-level executives), pushing through massive changes in just one week.
The problem is that Twitter’s revenue has been in free fall since Musk took over.
Advertisers, worried about content moderation, are cutting back their ad spending on the platform, while Musk has complained that “activists are pressuring advertisers,” causing revenue to drop sharply.
We’ve done our absolute best to appease them, and nothing is working. This is a major concern. We have done absolutely everything to appease the activists, but it has all been in vain. This is a very serious issue for freedom of expression.
Musk went a step further on Friday, threatening to publicly expose companies that have paused their advertising on Twitter. He did this even though most advertisers have said they will watch how Twitter changes before deciding whether to resume their campaigns.
A thermonuclear name & shame is exactly what will happen if this continues
By warning that “if this continues, they will face thermonuclear shame,” he is indirectly signaling just how steep the decline in Twitter’s ad revenue has been.
Food and beverage giant General Mills, Oreo maker Mondelez International, and Pfizer (PFE) have all temporarily halted their advertising on Twitter, and other brands are also pausing or reviewing their ad spending on the platform.
Amid this advertiser exodus and mass layoffs affecting half the staff, Musk has rolled out a new business model: Twitter Blue. Subscribers to Twitter Blue will get a blue check badge next to their profile photo, which was previously reserved for accounts officially verified by Twitter. The subscription fee has been set at $8 per month.
The catch is that most of the 420,000 people who were already “verified” by Twitter are not happy about this change.
Given that Twitter is a highly concentrated platform where a small number of influencers dominate, this kind of decision—one that alienates its core user base—raises serious questions about Twitter’s viability as a community.
Newsletter
Be the first to get news about original content, newsletters, and special events.