Inside Elon Musk’s Takeover of Twitter

SAN FRANCISCO — Elon Musk had a demand.

On Oct. 28, hours thereafter completing his $44 billion buyout of Twitter the night before, Mr. Musk gathered several human-resource executives in a “war room” in the company’s offices in San Francisco. Six people familiar with the discussion told him to prepare for widespread layoffs. Twitter’s work force needed to be slashed immediately, he said, and those who were cut would not receive bonuses that were set to be paid on Nov. 1.

According to people, the executives warned their boss that his plan could be in violation of employment laws and would breach workers’ contracts, resulting in employee lawsuits. But Mr. Musk’s team said he was used to going to court and paying penalties, and was not worried about the risks. So Twitter’s human-resource, accounting and legal departments scrambled to figure out how to comply with his command.

Three people told Musk that two days later, he learned how expensive these lawsuits and possible fines could be. As managers argued over who to let go, delays were becoming more frequent. He decided to delay cutting jobs until after Nov.

The immediate layoffs, panic and the subsequent about-face are all signs of the chaos that has gripped Twitter since Mr. Musk took control of the company two weeks ago. The 51-year old came in with ideas, but no plan for execution. Then, he quickly ran into trouble. business, legal and financial complexitiesIt is possible to run a platform that has been referred to as a global square.

According to 36 former and current Twitter employees, people close to the company, and internal documents and workplace chat logs, the fallout has often been painful. Emails were used to fire some of the most senior executives. One engineer manager vomited into the trash can after being told to reduce hundreds of workers. Others slept in the office as they worked grueling schedules to meet Mr. Musk’s orders.

Twitter, which is under financial pressureA slumping economy and debt, it is now not as evident as it was one month ago. Last week Mr. Musk slashed 50 percent of the company’s 7,500 employees. Resignations by senior executives have not stopped. Misinformation proliferated on the platform during Tuesday’s midterm elections. The key project to increase revenue from subscriptions ran into problems. Advertisers have been shocked.

Musk, who didn’t respond to a request for comments, told employees in a meeting on Thursday that Twitter’s situation was grim.

“There’s a massive negative cash flow, and bankruptcy is not out of the question,” he said, according to a recording heard by The New York Times.

Musk said that the team would have to work hard to keep the company afloat. “Those who are able to go hard core and play to win, Twitter is a good place,” he said. “And those who are not, totally understand, but then Twitter is not for you.”

‘Let that sink in!’

Mr. Musk arrived at Twitter’s San Francisco offices on Oct. 26, toting a white porcelain sink through the glass doors of the building. “Let that sink in!” he tweeted at the time, along with a videoHis grand entrance.

Leslie Berland, Twitter’s chief marketing officer, encouraged employees to say hi to Mr. Musk and escorted him through the office. He was seen chatting to employees at the company coffee bar.

However, the mood quickly changed. The next day, Parag Agrawal, Twitter’s chief executive, and Ned Segal, the chief financial officer, were in the office, two people familiar with the situation said. Once they knew Mr. Musk’s acquisition of Twitter was closing that afternoon, they left the building, uncertain what the new owner would do.

Two people familiar to the situation said that Mr. Agrawal was soon notified by email that he and Mr. Segal had been fired. Vijaya Gadde, Twitter’s top legal and policy executive, and Sean Edgett, the general counsel, were also fired. Mr. Edgett, who was in Twitter’s offices at the time, was escorted out.

That evening, Twitter hosted a Halloween party called “Trick or Tweet” for employees and their families. Some employees dressed up in costumes to keep the mood festive. Others cried and hugged each other.

Musk had brought his own advisersMany of them had previously worked for his other businesses such as PayPal and Tesla, which are digital payments companies. They parked themselves in the “war room,” on the second floor of a building attached to Twitter’s headquarters. This was the area Twitter used to host dignitaries and advertisers with large budgets.

The advisers included the venture capitalists David Sacks, Jason Calacanis and Sriram Krishnan; Mr. Musk’s personal lawyer Alex Spiro; his financial manager Jared Birchall; and Antonio Gracias, a former Tesla director. Joining in were engineers and others from Tesla; from Mr. Musk’s brain interface start-up, Neuralink; and from his tunneling company, the Boring Company.

At times, Mr. Musk was spotted with his 2-year-old son, X Æ A-12, at Twitter’s office as he greeted employees.

M. Musk was direct in his meetings with Twitter executives. At the Oct. 28 meeting of human-resource executives, Musk stated that he wanted the immediate reduction in work force, before a Nov. 1 date at which employees would receive regularly scheduled retention bonus in the form vested stocks. Tech companies often offer employees regular share grants that increase in value over time.

One Twitter team started to create a financial model that would show the cost associated with the layoffs. Another model was created to show how much Mr. Musk would have to pay in legal fees and penalties if he continued with the rapid cuts. Three people said.

Musk was informed on Oct. 30 that the rapid approach could result in millions of dollars more than simply laying off employees with their bonuses. Four people suggested that he agreed to delay.

He had a condition. Before paying the bonuses, Mr. Musk insisted on a payroll audit to confirm that Twitter’s employees were “real humans.” He voiced concerns that “ghost employees” who should not receive the money lingered in Twitter’s systems.

Mr. Musk tapped Robert Kaiden, Twitter’s chief accounting officer, to conduct the audit. Mr. Kaiden questioned managers about their ability to verify that certain employees were known to them and could confirm that they were humans, according to three people as well as an internal document seen to The Times.

No mass layoffs were possible at the Nov. 1 bonus date. Five people who knew the situation said that Mr. Kaiden was fired and marched out the building the next day.

A trip to New York

As Twitter managers compiled lists for layoffs, Mr. Musk flew to New York to meet with advertisers, who provide the bulk of Twitter’s revenue.

In some advertiser meetings, Mr. Musk proposed a system for Twitter users to choose the kind of content that the service exposed them to — akin to G to NC-17 movie ratings — implying that brands could then target their advertising on the platform better. Two people familiar with the discussions said that he also committed to product improvements, as well as more personalization for users.

But his outreach was undercut by the departures of two New York-based Twitter executives — Ms. Berland and JP Maheu, a vice president in charge of advertising. They were well-known in the advertising community.

Those Twitter executives “had great relationships with the senior-most people at the Fortune 500 — they were incredibly transparent and inclusive,” said Lou Paskalis, a longtime advertising executive. “Those things engender tremendous trust, and those things are now in question.”

Brands such as United Airlines, General Motors, Volkswagen Group and Volkswagen Group have all stated they will. pause advertising on Twitter as they evaluate Mr. Musk’s ownership of the platform.

Mr. Musk promoted some Twitter employees. Esther Crawford, a product manger, was tapped to redesign Twitter Blue, a subscription service. Musk wanted a new version that would cost $8 per month and would include premium features as well as the verification check mark that was previously given for free to celebrities, journalists, politicians, and others to verify their authenticity.

He laid down a deadline: The team must finish Twitter Blue’s changes by Nov. 7 or its members would be fired.

Last week, Ms. Crawford shared a photo of herself sleeping at Twitter’s San Francisco offices in a sleeping bag and an eye mask, with the hashtag #SleepWhereYouWork.

Some colleagues were not happy with her message. They questioned why they would work so hard for a man who could fire us, according to five people. Ms. Crawford can be found on Twitter. responded to what she called “hecklers” by saying she had received supportive messages from other entrepreneurs and “builders of all types.”

The axe falls

The scale of layoffs was a moving target. Three people stated that Twitter managers were initially instructed to reduce 25 percent of their work force. But Tesla engineers who reviewed Twitter’s code proposed deeper cuts to the engineering teams. Executives in charge of other parts of Twitter were advised to increase their layoff lists.

Twitter executives also suggested that the lists should be re-evaluated for diversity issues and inclusion to ensure that people of color are not disproportionately affected and to avoid legal trouble. Mr. Musk’s team brushed aside the suggestion, two people said.

Employees found a channel within the Slack messaging system that allowed them to discuss the layoffs. According to one employee, 3,738 workers could lose their jobs, or approximately half of the work force, according to a message obtained by The Times. This message was widely shared within the company.

According to a calendar invitation obtained by The Times, Musk met with advisers to agree on the reduction. They were joined by employees from Twitter’s human resources and staff from his other companies.

Employees began to bid farewell, swapping phone numbers, and connecting with LinkedIn in preparation for the cuts. They also pulled together documents to assist workers who survived the layoffs.

One engineering manager was approached by Mr. Musk’s advisers — or “goons,” as Twitter employees called them — with a list of hundreds of people he had to let go. He vomited into the trash can at his feet.

Nov. 3, 2009, late an email landed in employees’ inboxes. “In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global work force,” the email, signed “Twitter,” said.

Pandemonium ensued. Although the note indicated that employees would receive an email the following morning to inquire about their jobs, many found themselves locked out from email or Slack the night before, which was a sign that they had been laid-off. To send a message to co-workers, those who remained on Slack posted masses of saluting Emojis.

These were huge cuts. In Redbird, Twitter’s platform and infrastructure organization, Mr. Musk shed numerous managers. The unit also lost about 80 percent of its engineering staff, raising internal concerns about the company’s ability to keep its site up and running.

In Bluebird, Twitter’s consumer division, dozens of product managers were laid off, leaving just over a dozen of them. One estimate showed that the new ratio between engineers and managers was 70-1.

The aftermath

Tech recruiters saw an opportunity as layoffs arose. Top managers at competitors companies such as MetaTwo people who saw the notes said that Google sent messages to some employees being fired from Twitter.

Most of Mr. Musk’s subordinates remained quiet throughout the process. Venture capitalist Mr. Calacanis had been active on Twitter responding and suggesting products.

Last week, Mr. Musk dispatched a lieutenant to the “war room” to ask Mr. Calacanis, who was there, to cool it on Twitter and stop acting as if he were leading product development or policy, people familiar with the exchange said.

“To be clear, Elon is the product manager and CEO,” Mr. Calacanis later tweeted. “As a power user (and that’s all I am!) I’m really excited.”

By last Saturday, Mr. Musk’s advisers realized that the cuts may have been too deep, four people said. Three people familiar with the conversation said that some asked laid-off engineers, product managers, and designers to return to their jobs. The tech newsletter PlatformerThe outreach was previously reported.

At Goldbird, Twitter’s revenue division, the company had to bring back those who ran key money-generating products that “no one else knows how to operate,” people with knowledge of the business said. One manager agreed to try rehiring some laid-off workers, but expressed concerns that they were “weak, lazy, unmotivated and they may even be against an Elon Twitter,” two people familiar with the matter said.

Twitter employees found that certain systems they relied upon were no longer working on Monday. An engineer in San Francisco discovered that certain contracts with vendors who provide software to manage user data had been placed on hold or expired. The managers and executives who could solve the problem were either laid off or resigned.

On Wednesday, workers in Twitter’s New York office were unable to use the Wi-Fi after a server room overheated and knocked it offline, two people said.

Mr. Musk plans to begin making employees pay for lunch — which had been free — at the company cafeteria, two people said.

An internal conflict

Inside Twitter, some employees have clashed with Mr. Musk’s advisers.

This week, security executives disagreed with Mr. Musk’s team over how Twitter should meet its obligations to the Federal Trade Commission. Twitter had agreed to a settlement with the F.T.C.2011 for privacy violations. This requires the company submit regular reports on its privacy practices and to open its doors to audits.

On Wednesday, a day before a deadline for Twitter to submit a report to the F.T.C., Twitter’s chief information security officer, Lea Kissner; chief privacy officer, Damien Kieran; and chief compliance officer, Marianne Fogarty, resigned.

In internal messages later that day, an employee wrote about the resignations and suggested that internal privacy reviews of Twitter’s products were not proceeding as they should under the F.T.C. settlement.

Some engineers could be required to “self-certify” that their projects complied with the settlement, rather than relying on reviews from lawyers and executives, a shift that could lead to “major incidents,” the employee wrote.

“Elon has shown that his only priority with Twitter users is how to monetize them,” the person wrote in the message, which was viewed by The Times.

The employee added that Mr. Spiro, Mr. Musk’s lawyer, had said the billionaire was willing to take risks. Mr. Spiro, the employee said, told workers that “Elon puts rockets into space — he’s not afraid of the F.T.C.”

The F.T.C. said that it was tracking the developments at Twitter with “deep concern” and that “no C.E.O. or company is above the law.” Mr. Musk later sent employees an email saying Twitter will adhere to the F.T.C. settlement.

On Thursday, Twitter executives resigned more, including Kathleen Pacini (a human-resources leader) and Yoel Roth (the head of trust and security).

At the meeting with employees that day, Mr. Musk tried to sound a note of optimism about Twitter’s future.

“Twitter can form an incredibly valuable service to the world and be the public town square,” he said, noting it should be a “battleground of ideas” where debate could “take the place of violence in a lot of cases.”

Reporting was provided by Kevin Roose, Lauren Hirsch, Kitty Bennett David McCabe.