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Elon Musk: Twitter would have lost $3 billion if it hadn't been for cost cuts.
Not the most popular measures, such as reducing the number of staff by almost three times after the purchase of Elon Musk by Twitter, in his own words, made it possible to significantly reduce costs in the end, otherwise it would have started next year with a negative cash flow of $ 3 billion. By 2023, according to Musk, Twitter should break even, at a minimum, although this will not be easy.
“In the past five weeks, I’ve been cutting costs like crazy,” Elon Musk admitted during a podcast on Twitter Spaces. He further compared the company to "a plane hurtling towards the ground with burning engines and broken controls." As the current head of Twitter added, at the end of October, when he bought the company, it was supposed to bring in revenue of $3 billion and end the year with $1 billion of free funds on the balance sheet. Now he is convinced that next year Twitter will be all right, and she will be able to avoid negative cash flow. Advertisers are asking reasonable but tough questions about their return to the market, Musk said.
Prior to Elon Musk's purchase of Twitter, the company had every chance of ending fiscal 2022 with $5.2 billion in revenue. Now, the company's main owner believes that on a cash flow level, the company could have gone $3 billion negative next year if it weren't for him. managed to cut costs after purchasing assets at the end of October. The total amount of the deal was estimated at $44 billion, with $13 billion in debt obligations following its results went directly to Twitter, and in the coming year alone it had to pay back $1.5 billion to creditors. Twitter was a profitable company at the beginning of this year, but by the beginning of November it was losing $4 million a day.
Musk did not explain what role the December sale of Tesla shares he owned for a total of $ 3.6 billion played in the recovery of Twitter. Today, we recall, Elon Musk expressed his readiness to comply with the decision of social network users to leave the post of CEO, but promised first to find a successor, and then retain control of the software and server side of Twitter's business.