In one of his first all-hands meetings after taking over the company in October, Elon Musk told Twitter employees the website’s financial position was dire, warning bankruptcy was “not out of question.” Since then, it appears the situation at Twitter has become more fraught.
The New York Times reports the company is taking drastic steps to cut costs. In recent “weeks,” Twitter has reportedly not paid rent for its main headquarters in San Francisco and satellite offices in other countries. According to court documents obtained by The Times, the company has also refused to pay a $197,725 bill for charter flights Musk took during his first week at Twitter. Simultaneously, the social media website has continued to cut staff – despite Musk having recently told employees the company was done with layoffs. Among the most recent casualties include Nelson Abramson, the company’s global head of infrastructure. On Monday, the company disbanded its Trust and Safety Council of external advisors.
According to The Times, Musk and other executives have also talked about the potential consequences of denying severance payments to the thousands of people who were let go from the company in recent weeks. When he first took ownership of Twitter, Musk reportedly considered dismissing many of the employees who were subsequently laid off without any severance. However, he eventually decided to give US employees at least two months of pay and one month of severance, a move that ensured the company was in compliance with state and federal labor laws.
Amid those cost-cutting efforts, Musk has reshaped Twitter’s legal team in anticipation of the legal battles the company is likely to face in the near future. He recently dismissed Alex Spiro. The criminal defense lawyer was one of Musk’s close personal allies. In 2019, he successfully defended the billionaire in his infamous “pedo guy” defamation case. Musk had charged Spiro with leading the company’s legal and policy teams but reportedly became displeased with his personal lawyer after finding out he had kept James Baker on as Twitter’s deputy general counsel. Musk fired Baker after finding out the former FBI attorney had been responsible for reviewing the company’s decision to restrict posts related to a 2020 article The New York Post published about Hunter Biden’s laptop.
Since then, Musk has reportedly brought over “more than half a dozen” lawyers from SpaceX to fill the void left by Spiro and Baker. Among those who are now advising Twitter include SpaceX's Senior Vice President and General Counsel Tim Hughes. Anticipating potential litigation, Musk has also told employees not to pay travel invoices and other vendors the company owes money to for their services.