Musk Conquers, Then Divides

Image source: worachet homkajon - Shutterstock

What's going on?

Elon Musk reportedly laid out plans this week to cut half of Twitters workforce.

What does this mean?

It was back in the heady days of early spring that Elon Musk first offered to buy Twitter, and its taken him till past spooky season to make good on his offer. The interims been pretty chaotic, but a whirlwind of back-and-forths, legal challenges and defenses ultimately forced the deal through and now the worlds richest man is on a cost-cutting crusade. Little wonder, either: markets have tumbled drastically since April, meaning its likely Musk seriously overpaid for the big blue bird. Thats probably only strengthening his resolve to bid adieu to 3,700 employees, half Twitters entire workforce.

Why should I care?

Zooming in: Free speech, empty pockets.
Cutting costs is just one side of the equation: Twitter needs to start bringing in more dough too, and that could prove trickier. See, Musks vision of Twitter as a bastion of free speech has got businesses clutching their pearls (tweet this), halting ad spending left, right, and center. Interpublic one of the worlds biggest ad groups told its clients to postpone Twitter ads for at least a week, and companies like Carlsberg and General Motors are taking the same tack.

The bigger picture: Born to be blue.
One bright money-raising idea of Musks is to charge $8 a month for perks like fewer ads, boosted tweets, and the little blue verification tick that appears next to users handles a badge of honor that used to be the preserve of high-falutin celebs, politicians, and journalists. But the plans not without issues: for one, it could ironically make it easier to impersonate people, with any paying, fake account suddenly rubber-stamped in blue. And for another, it could create a potentially ugly divide between those who can and cant afford the fee, amplifying paying users voices over everyone elses.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over one million Finimizers

Read next

Shape Up Or Ship Out

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.