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Since the beginning of November, Elon Musk has cut Twitter costs by $500 million and started saving on office cleaning and security.

Published: 2023-01-01

Last week, Elon Musk, which acquired Twitter at the end of October, revealed the social network's current headcount at just over 2,000 people. Prior to the transaction, the company employed 7,500 people. The scale of cost savings has reached the point that security guards and cleaners lose their jobs, and the remaining employees began to bring toilet paper from home.

Musk recently admitted that in the five weeks after buying Twitter, he was "cutting costs like crazy." Since the beginning of November, the company has managed to save about $500 million on non-employee expenses alone. As the head of Twitter explained, without such measures, the company would have faced the formation of negative cash flow in the amount of $3 billion in 2023.

Although Musk and his associates fired almost three of the four employees who worked at Twitter at the time of the deal, some of the vacant positions were filled by “recruits”. According to the publication, they were given no more than 90 minutes to get up to speed instead of the typical three days, and as a result, newly hired specialists had a very remote idea of their new job responsibilities.

The closure of a large data center in Sacramento last week, according to unofficial sources, could be one of the reasons for the recent technical failures in the Twitter user authentication system. Elon Musk himself flaunted the stable operation of the social network after the outage, but former employees of the company responsible for maintaining the infrastructure called the actions of the billionaire destructive. According to them, shutting down data centers could lead to loss of information and reduce the backup computing power of Twitter by about 30%. Any rise in Twitter traffic can eventually lead to an overload of the remaining equipment. Experts estimate that if the Sacramento center had continued to operate, the recent outage in the functioning of Twitter would certainly have been avoided.

Office rent was another one of Twitter's new leadership's targeted savings. At the company's San Francisco headquarters, Musk concentrated employees on two floors and vacated four others. He simply fired those who tried to get a raise in the salary of cleaners. In New York, not only all the cleaners were cut, but also 10 security guards. As expected, the local office of Twitter will eventually also be abandoned, as happened the other day in Seattle.

Costs for contractor services are being actively reduced. Contracts with consulting and audit companies like Deloitte and KPMG are being reviewed, it is likely that they will not be renewed next year. Twitter employees have also been lost as medical support, as some programs related to the reproductive functions of staff will now lose funding in the same amount. At the same time, Musk is trying to combat leaks of information about his actions as head of Twitter, as he tries to avoid publicity at some points.

In general, according to anonymous sources, Musk's henchmen in the leadership of Twitter proceed from the tactics of "zero funding", forcing lower-level executives to fight to prove the validity of each item of expenditure. Contracts with contractors are carefully analyzed for the possibility of reducing the amounts paid to them, as a result, the payments themselves are constantly delayed. At the same time, Musk does not consider it shameful to pay rewards from the Twitter budget to those employees of his other companies (Tesla and SpaceX), whom he attracted to work as consultants - approximately until January or February of the coming year.