Irish Examiner view: Day of reckoning for regular loss-maker

Elon Musk declared that 'the bird is freed' after paying $44bn to buy Twitter. But the firm is bleeding money and faces further challenges in his ownership and could yet turn into a dead duck

Elon Musk may be suffering buyer’s remorse after paying out an eye-watering $44bn to buy social the Twitter media platform. Picture: Jeff Chiu/AP

There have been increasing indications of buyer’s remorse emanating from the desk of Elon Musk since he paid the eye-watering, headline-gathering sum of $44bn (€44.4bn) on October 27 for Twitter, a company which lost $221m last year, and has bled money in seven out of the nine years that it has been listed on the New York stock exchange. A company, also, which has undergone a longstanding debate about its user numbers.

For the rest of us, that financial performance would spell ruin. But when you are a “Master of the Universe” — the phrase coined by Tom Wolfe in the prophetic 1980s serialised novel The Bonfire of the Vanities — you can see other things. 

Opportunity, for example.

This week, Musk had an opportunity to sack half of his newly acquired workforce, or “let them go” in that emollient, sedating, phrase which is designed to dilute an unpleasant decision implying, as it does, that the employer is simply acceding to an ambition long held by the employee.

Termination, for that is what it is, is done in a characteristically antiseptic hi-tech manner. Via email. Whether that comes with a blue tick, a red cross, or one of those glum emojis people seem to favour, it all amounts to the same thing. You’re out.

The company employs some 7,500 people worldwide including 500 in Dublin — a headcount which more than doubled during the pandemic — and we won’t know how many are left until the smoke clears. 

The first inklings some workers had was when they awoke to find they had been locked out of their company account and other applications and equipment needed to carry out their tasks. What is already clear is that roles which have gone include “community” managers — people who moderate postings — precisely the area of activity where Twitter is in trouble with legislators and politicians around the world, and policy executives.

While the reduction programme has been long expected, Elon Musk’s first week holding the reins have not provided an encouraging certainty of touch to reassure the bankers and investors who have backed the world’s richest man in a project that has more to do with influence and politics than his specialist areas of technological opportunity and change.

He argued that the company had suffered a massive drop in revenue “due to activity groups pressuring advertisers, even though nothing has changed with content moderation, and we did everything to appease the activists”. He also promised Twitter will not become a “free-for-all hellscape.”

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Equally worrying are reports that a significant number of users who warned they would quit the platform if the takeover went ahead are following through on that threat. One company which tracks online behaviour says 877,000 accounts were deactivated and a further 497,000 suspended between October 27 and November 1, more than double the usual rate of attrition.

When Musk’s purchase was confirmed, he tweeted the message: “The bird is freed.” 

Whether it’s turned into a dead duck by an increasing flight of its supporters because they don’t like the $8 per month verification service, or its hate speech policies, or because Donald Trump continues to stay away, it is likely to be one of the most interesting spectator sports of this winter.