Twitter survival at stake, Musk warns as remote work ends
SAN FRANCISCO (CBS SF/AP) – Elon Musk is warning Twitter employees to brace for "difficult times ahead" that might end with the collapse of the social media platform if they can't find new ways of making money.
Workers who survived last week's mass layoffs are facing harsher work conditions and growing uncertainty about their ability to keep Twitter running safely as it continues to lose high-level leaders responsible for data privacy, cybersecurity and complying with regulations.
Musk's first companywide message to employees came by email late Wednesday night and ordered them to stop working from home and show up in the office Thursday morning. He followed that with his first "all-hands" meeting Thursday answering workers' concerns. Before that, many were relying on the billionaire Tesla CEO's public tweets for clues about Twitter's future.
"Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message," wrote Musk, before he described a dire economic climate for businesses like Twitter that rely almost entirely on advertising to make money.
"Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn," Musk said. "We need roughly half of our revenue to be subscription."
Musk addressed employees again during a staff meeting Thursday afternoon, telling them that some "exceptional" employees could seek an exemption from his return-to-work order but that others who didn't like it could quit, according to an employee at the meeting who spoke on condition of anonymity out of a concern for job security.
The employee also said Musk appeared to downplay employee concerns about how a pared-back Twitter workforce was handling its obligations to maintain privacy and data security standards, saying as CEO of Tesla he knew how that worked.
Musk's memo and staff meeting echoed a livestreamed conversation trying to assuage major advertisers Wednesday, his most expansive public comments about Twitter's direction since he closed a $44 billion deal to buy the social media platform late last month and dismissed its top executives. A number of well-known brands have paused advertising on Twitter as they wait to see how Musk's proposals to relax content rules against hate and misinformation affect the tenor of the platform.
Musk told employees the "priority over the past 10 days" was to develop and launch Twitter's new subscription service for $7.99 a month that includes a blue check mark next to the name of paid members — the mark was previously only for verified accounts. Musk's project has had a rocky rollout with an onslaught of newly bought fake accounts this week impersonating high-profile figures such as basketball star LeBron James, former U.S. President George W. Bush and the drug company Eli Lilly to post false information or offensive jokes.
An executive last week said Twitter was cutting roughly 50% of its workforce, which numbered 7,500 earlier this year.
Musk had previously expressed distaste for Twitter's pandemic-era remote work policies that enabled team leaders to decide if employees had to show up in the office. On Wednesday, he ordered all employees to return to the office Thursday.
Musk told employees in the email that "remote work is no longer allowed" and the road ahead is "arduous and will require intense work to succeed." He said he would personally review any request for an exception.
Twitter hasn't disclosed the total number of layoffs across its global workforce but told local and state officials in the U.S. that it was cutting 784 workers at its San Francisco headquarters, about 200 elsewhere in California, more than 400 in New York City, more than 200 in Seattle and about 80 in Atlanta.
The exodus at Twitter is ongoing, including the company's chief information security officer Lea Kissner, who tweeted Thursday that "I've made the hard decision to leave Twitter."
Cybersecurity expert Alex Stamos, a former Facebook security chief, tweeted Thursday that there is a "serious risk of a breach with drastically reduced staff" that could also put Twitter at odds with a 2011 order from the Federal Trade Commission that required it to address serious data security lapses.
"Twitter made huge strides towards a more rational internal security model and backsliding will put them in trouble with the FTC" and other regulators in the U.S. and Europe, Stamos said.
The FTC said in a statement Thursday that it is "tracking recent developments at Twitter with deep concern."
"No CEO or company is above the law, and companies must follow our consent decrees," said the agency's statement. "Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them."
The FTC would not say whether it was investigating Twitter for potential violations. If it were, it is empowered to demand documents and depose employees.
Twitter paid a $150 million penalty in May for violating the 2011 consent order and its updated version established new procedures requiring the company to implement an enhanced privacy protection program as well as beefing up info security.
Those new procedures include an exhaustive list of disclosures Twitter must make to the FTC when introducing new products and services — particularly when they affect personal data collected on users.
Musk is, of course, fundamentally overhauling platform offerings, and it's not known if he is telling the FTC about it. Twitter, which gutted its communications department, didn't respond to a request for comment Thursday.
Musk has a history of tangling with regulators. "I do not respect the SEC," Musk declared in a 2018 tweet.
The Securities and Exchange Commission recently examined for possible tardiness his disclosures to the agency of his purchases of Twitter stock to amass a major stake. In 2018, Musk and Tesla each agreed to pay $20 million in fines over Musk's allegedly misleading tweets saying he'd secured the funding to take the electric car maker private for $420 a share. Musk has fought the SEC in court over compliance with the agreement.
The consequences for not meeting FTC's requirements can be severe — such as when Facebook had to pay $5 billion for privacy violations.
"If Twitter so much as sneezes, it has to do a privacy review beforehand," tweeted Riana Pfefferkorn, a Stanford University researcher who said she previously provided Twitter outside legal counsel. "There are periodic outside audits, and the FTC can monitor compliance."
Twitter was fined in May for the alleged commercial exploit of customers data — phone numbers and email addresses — that it had claimed it needed for security purposes, such as enabling multi-factor authentication.
