Shulou(Shulou.com)11/24 Report--

Beijing, Oct. 24 (Xinhua) the plan of Elon Musk, the richest man in the world, to run Twitter now seems to be very different from the plan he put forward when he first agreed to buy the company in April.

In the first few days after the deal, Musk made an ambitious proposal to investors. Mr Musk had planned to increase the number of Twitter employees from 7500 to 11072, an increase of 48 per cent, according to a financing plan published in May.

Less than six months later, however, Musk now wants to cut Twitter's workforce by nearly 75%, slashing it to just 2000.

Why did you change your mind? Ali Mogharabi, a Twitter analyst at Morningstar, an investment research firm, said he had not seen a significant change in Twitter's business, justifying Mr Musk's drastic changes to the headcount plan. However, the reason may be external factors.

"there have been a lot of changes outside the company since Musk first talked to Twitter employees. The uncertainty of the macro environment must have increased." Mogarabi is referring to the overall economic slowdown.

Musk may tell Twitter that most of its revenue comes from advertising and that Twitter's revenue is likely to fall as the potential recession spooks advertisers.

Become a cash cow although Musk raised the possibility of layoffs in 2023 in his financing plan in May, there was no indication that he might lay off more than 5000 employees.

Mr Mogarabi estimates that the slowdown in Twitter's potential revenue and the investors who funded Mr Musk's acquisition of Twitter may "ask Mr Musk to turn the business into a cash cow", which may be the reason for his big change of attitude.

Mark Shmulik, a Twitter analyst at Bernstein, an investment bank, believes that such large-scale layoffs could hurt the company's profits rather than help boost them. " I've always thought that you can divide these companies into three different categories: fat, muscle and bone. Fat is something like those discretionary projects, muscles may be income-generating things, but on a smaller scale, and bones are the key to survival. If you really want to lay off 75% of your Twitter employees, you will lose some muscle as well as lose all the fat. "

"I think if the deal is completed and he moves in that direction, we will certainly see how streamlined these advertising agencies can actually be."

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