Will Twitter hold up over time? According to Elon Musk, the answer is yes, because there have been various cost reductions in recent weeks that will allow the social network to still exist in 2023.
Here’s what Elon Musk said during a Twitter Spaces about it:
That’s why I’ve spent the last five weeks cutting costs like crazy. This is the reason for my actions. They can sometimes appear misleading, bizarre or otherwise. That’s because we have an emergency fire drill on our hands.
This business is like being in a plane heading towards the ground at high speed with the engines on fire and the controls not working (…) I think now that Twitter is really going to get away with it next year.
Since becoming the owner of Twitter in late October, Elon Musk has fired about half of the company’s 7,500 employees. He announced this week that he plans to hand over management of the company as soon as he “finds someone crazy enough” to succeed him. He thus took into account the result of a poll he had launched on Sunday, after which 57% of the approximately 17 million participating users declared his departure.
Necessary changes according to Elon Musk
The one who is also in control of Tesla and SpaceX has also indicated that, according to his forecasts, the social network can achieve a turnover of about 3 billion dollars next year. If this figure is confirmed, it will correspond to a 41% decrease compared to the revenues achieved in 2021.
If no changes had been made to Twitter’s cost structure, according to the billionaire, the company would have spent between 6 and 6.5 billion dollars in 2023. This sum includes the payment of part of the principal and interest related to the loans taken out by Elon Musk to buy Twitter , and which must now be praised by the group and not by the entrepreneur. He estimates this payment at about $1.5 billion for 2023. The social network thus risked ending the year 2023 with a reduced cash flow of about $3 billion, according to estimates by the new boss.