Twitter descends into chaos - and Musk even risks bankruptcy

The first email from the new boss came late Wednesday evening. And she took little courage. "We have a difficult road ahead of us," Elon Musk wrote to Twitter employees. So there will be several changes. He immediately announced one thing: Everyone has to go back to the office. On five days a week.

Gone are the days when short message service workers could work where they wanted. "If you can physically make it to the office and don't show up," Musk is said to have specified at a staff meeting, "the termination is considered accepted."

Twitter was considered a feel-good company, a kind of wellness oasis for programmers. There was one paid day off each month to allow employees to "recharge," as former boss Jack Dorsey put it. Musk also eliminated these "days of rest" and instead mandated some departments to work 12-hour shifts. A photo of an employee sleeping on the floor of a conference room, wedged between tables and chairs, has been circulating on social media.

Musk has been running Twitter for two weeks - and throwing the company into chaos. He fired 3,700 employees and asked some to return shortly afterwards, probably out of concern the platform might collapse. He blocked the profiles of comedians who had posed as Musk and made fun of him, even though he actually wants to fight for more freedom of expression.

Five fired employees sued him in court. And major advertisers, including Volkswagen, withdrew their ads. They don't want anything to do with Musk's mess.

"So far it's been a debacle," says Jonah Goldberg of the conservative Washington think tank American Enterprise Institute. "Musk is a visionary entrepreneur, but running a social network seems to be more difficult for him than building rockets."

A week ago on Friday, at nine sharp local time, all employees received an email from Human Resources. Subject: "Your Role at Twitter" They were told in a few lines whether they could stay or had to go. Already the evening before, some had suspected that their time with the network was coming to an end after suddenly being unable to log into their company laptops and internal chat programs at home.

Musk has made cuts everywhere: in the privacy and fact-checking departments, in marketing and communications, in the team that oversees site stability. The billionaire thinks Twitter is stodgy, pompous. One of his 114 million followers asked him what the company's biggest problem was. Musk replied: There seems to be ten people per programmer managing anything.

But maybe he went too far. Last Saturday, less than 24 hours after the mass layoff, Musk apparently asked several programmers if they could return. This is what you read on the Blind platform, popular in America, where employees can talk anonymously about their companies. There were signs of trouble on Twitter. Longer loading times, incorrect follower counts, strange-looking retweets. It is quite possible that Musk lacked the engineers to maintain the site.

A few days ago, Twitter submitted documents to an authority called FinCEN. Sounds bureaucratic, but could be the start of a revolution. Because it is one of the first steps in the USA for companies that want to offer financial services. Musk hinted at what that could be this week. High yield accounts, debit cards, mobile payments. He has experience with such technologies. In 1999, Musk co-founded X.com, an online bank that later became part of PayPal.

But paying via Twitter might just be the beginning. The Tesla founder dreams of a platform for everything. From a super network where you can shop, post, chat, play, book doctor's appointments, order food, hail cabs. Something like this already exists in China. More than half of the population there use WeChat to regulate their everyday life, without the app public life in the country would collapse. Musk now wants to create a kind of WeChat for the West.

Musk repeatedly complains that America's tech companies are too leftist and that Silicon Valley is suppressing conservative voices. He wants to turn Twitter into what he calls a “freedom of expression” and end the alleged censorship. Before the US midterm elections last Tuesday, Musk tweeted a recommendation for the Republicans. He would also like to bring Donald Trump back on the platform, who was suspended in January 2021 after the Capitol storm.

Musk also announced that he would fight fake accounts and spam and make Twitter the "most correct source of information in the world". But how far can he go? For example, Musk's company, Tesla, builds tens of thousands of electric cars every month in a massive factory in Shanghai and sources key raw materials from Chinese mines. But what if Beijing dislikes the way Musk runs Twitter? The government has repeatedly complained that its newspapers are labeled as "state media" on the platform.

Musk's erratic management style and his spontaneous decisions are exactly the opposite of what has characterized Twitter so far: Even small innovations were discussed internally for weeks. Now Musk changes rules every hour and finds out how difficult a social network is to manage.

That shows the chaos around the blue hook. Before his acquisition, around 400,000 users, including celebrities, politicians, journalists, media and brands, were verified and their accounts were marked with a blue tick. Musk came up with the idea of ​​offering the status symbol for $8 a month — but underestimated users' willingness to invest in spoof accounts.

Suddenly, hundreds of supposedly verified Elon Musks mocked the new Twitter boss, an alleged George Bush tweeted about his lust for killing, and various false popes discussed who the real pope was. Musk repeatedly responded, banning name changes, demanding a "parody" label, introducing an additional "Official" label, only to shut it down 24 hours later, all while a senior Twitter executive announced she was staying.

Over the weekend, Musk's $8 offensive had persuaded environmental activists to have false company accounts verified with a blue tick. An account called "Nestlé" with official company logo tweeted: "We steal your water and sell it back to you."

A certain "Lockheed Martin" announced that they would willingly sell arms to any dictator. Musk's $8 move had destroyed Twitter's most important asset: the network had previously been a trusted source for credible, authenticated messages direct from celebrities, businesses, and public figures. Now users have to take a close look at who is really tweeting.

For advertisers, Musk's mayhem is as daunting as the spate of parody users hijacking her name. Various large agencies and media marketers are withdrawing their campaigns. At the beginning of the week, the agency group Interpublic, one of the largest advertising marketers in the world, recommended that its customers temporarily withdraw from Twitter. Big brands like Volkswagen and General Motors also suspended campaigns. On Thursday, Twitter's advertising sales chief Leslie Berland fired, and tech chief Nick Caldwell is also reluctant to continue working at the company.

Advertising brings about 90 percent of Twitter's sales. Without them, even Musk can't keep the company going. Accordingly, he himself warned in a letter to the employees of a possible bankruptcy of his 44 billion dollar investment. "Without significant subscription revenue, there's a good chance Twitter won't survive the coming economic downturn."

But even if the advertisers come back, there is a risk of collapse. Minor programming errors and irregularities in the operation of the site are already piling up. Apparently, the wave of layoffs also affected employees who were of great importance to the functioning of the site. If nobody maintains the infrastructure and keeps the program code up to date, analysts warned, Twitter could be dysfunctional in a matter of weeks. The bird falls.

"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.