Twitter has been the focus of many headlines recently due to its long battle with billionaire Elon Musk, but now Twitter is facing cutbacks.
Key details
Last week, Twitter warned employees that they could potentially receive only half of their typical annual bonuses.
The social media company blames the uncertain economy and its feud with Elon Musk as the reasoning for the big cuts. Last month, it was revealed how much the ongoing battle has hurt the company when its quarterly earnings were reported. The earnings report showed that Twitter’s revenue declined for the first time since 2020.
The social media company gets the majority of its revenue from advertisements, but the battle with Musk has advertisers worrying about the uncertainty for the future of the company and have cut back on spending.
It is not certain how much of the bonuses will be cut, but the bonus pool is currently at 50 percent of what it could be if the company met its financial targets, according to The New York Times. The numbers could continue to change throughout the year as earnings are reported.
Backing up a bit
The social media company has had a rough few months with its battle against Elon Musk. Here is what has happened:
In April, Elon Musk announced that he held a 9.2% stake in Twitter, which made him the social-media company’s largest shareholder. Twitter’s stock price soared 25 percent after the announcement.
Later that month, the billionaire entrepreneur offered to buy all of Twitter at $54.20 per share—equaling about $44 billion. He said he originally invested in the platform because he believes it is failing in its potential to be the leading platform for free speech around the globe. In fact, he asked his 2 million followers if Twitter adhered to principles of free speech, and 70 percent said “no.”
Last month, Musk decided to back out of the deal, claiming there were too many fake accounts on the platform. Twitter has since sued Musk in Delaware Court of Chancery to complete the deal and requested the trial to take place in September. Musk, on the other hand, wanted to delay the trial until February 2023, stating that a case of this size takes time to prepare. Twitter was granted its wish of an expedited trial, with Chancellor Kathaleen McCormick, the presiding judge, setting a five-day trial for October.
Musk then countersued Twitter, stating his reason for the termination was due to Twitter not being upfront about the number of fake accounts on the platform.
Most recently, Elon Musk and his legal team have subpoenaed Twitter’s founder and former CEO Jack Dorsey, to get him to release documents that provide accurate information on bots and spam accounts on the social-media platform and now these documents have come out from Zatko.
The trial is set for October, unless it can be settled before that date approaches.