Twitter's new owner Elon Musk on Thursday raised the possibility of the social media platform going bankrupt, capping a chaotic day that included a warning from a US privacy regulator and the exit of the company's trust and safety leader.
The billionaire on his first mass call with employees said
that he could not rule out bankruptcy, Bloomberg News reported, two weeks after
buying it for $44 billion - a deal that credit experts say has left Twitter's
finances in a precarious position.
Earlier in the day, in his first company-wide email, Musk
warned that Twitter would not be able to "survive the upcoming economic
downturn" if it fails to boost subscription revenue to offset falling
advertising income, three people who have seen the message told Reuters.
Yoel Roth, who has overseen Twitter's response to combat
hate speech, misinformation and spam on the service, resigned on Thursday, two
people familiar with the matter told Reuters.
In his Twitter profile on Thursday, Roth described himself
as "Former Head of Trust & Safety" at the company.
Roth did not respond to requests for comment. Bloomberg and
tech site Platformer reported his exit first.
Earlier on Thursday, Twitter's Chief Information Security
Officer Lea Kissner tweeted that she had quit.
I've made the hard decision to leave Twitter. I've had the opportunity to work with amazing people and I'm so proud of the privacy, security, and IT teams and the work we've done.
— Lea Kissner (@LeaKissner) November 10, 2022
I'm looking forward to figuring out what's next, starting with my reviews for @USENIXSecurity 😁
Chief Privacy Officer Damien Kieran and Chief Compliance
Officer Marianne Fogarty also resigned, according to an internal message posted
to Twitter's Slack messaging system on Thursday by an attorney on its privacy
team and seen by Reuters.
Robin Wheeler, the company's top ad sales executive, told
employees in a memo that she was staying at the company, a person who had seen
the message said, diverging from earlier media reports that she too would be
leaving.
"I'm still here," Wheeler tweeted late on
Thursday.
The US Federal Trade Commission said it was watching Twitter
with "deep concern" after the three privacy and compliance officers
quit. These resignations potentially put Twitter at risk of violating
regulatory orders.
Musk attorney Alex Spiro told some employees in an email
late on Thursday that Twitter would remain in compliance.
"We spoke to the FTC today about our continuing
obligations and have a constructive ongoing dialogue," Spiro wrote.
He stated that only Twitter, not individual employees, could
be held liable against the orders.
"I understand that there have been employees at Twitter
who do not even work on the FTC matter commenting that they could (go) to jail
if we were not in compliance - that is simply not how this works," he
wrote.
In his first meeting with many employees at Twitter on
Thursday afternoon, Musk warned that the company may lose billions of dollars
next year, the Information reported.
Musk added in the email to workers that remote work would no
longer be allowed and that they would be expected in the office for at least 40
hours per week.
Twitter, Musk and Spiro did not respond to requests for
comment on a potential bankruptcy, the FTC warning, or the departures.
Musk ruthlessly moved to clean house after taking over on
October 27 and has said the company was losing more than $4 million a day,
largely because advertisers started fleeing once he took over.
Twitter has $13 billion in debt after the deal and faces
interest payments totaling close to $1.2 billion in the next 12 months. The
payments exceed Twitter's most recently disclosed cash flow, which amounted to
$1.1 billion as of the end of June.
Musk has begun charging $8 a month for the Twitter Blue
service that will include a blue check verification.
Warning
"We are tracking recent developments at Twitter with
deep concern," Douglas Farrar, the FTC's director of public affairs, told
Reuters.
"No CEO or company is above the law, and companies must
follow our consent decrees. Our revised consent order gives us new tools to
ensure compliance, and we are prepared to use them," Farrar said.
In May, Twitter agreed to pay $150 million to settle
allegations by the FTC it misused private information, like phone numbers, to
target advertising to users after telling them the information was collected
only for security reasons.
Twitter's privacy attorney on Thursday mentioned in the
internal memo that Spiro had said that Musk was willing to take a "huge
amount of risk" with the company. "Elon puts rockets into space, he's
not afraid of the FTC," the attorney quoted Spiro as saying.
Twitter's buyout has sparked concerns that Musk, who has
often waded into political debates, could face pressure from countries trying
to control online speech.
It prompted US President Joe Biden to say on Wednesday that
Musk's "cooperation and/or technical relationships with other countries is
worthy of being looked at."
Advertisers not reassured
Musk told advertisers on Wednesday, speaking on Twitter's
Spaces feature, that he aimed to turn the platform into a force for truth and
stop fake accounts.
His assurances may not be enough.
Chipotle Mexican Grill said on Thursday it had pulled back
its paid and owned content on Twitter "while we gain a better
understanding on the direction of the platform under its new leadership."
It joined other brands including General Motors that have
paused advertising on Twitter since Musk took over, concerned that he will
loosen content moderation rules. © Reuters
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