This week, Elon Musk reportedly unveiled plans for cutting half of Twitter's personnel.
What does this mean?
It was back in the heady days of early spring that Elon Musk first offered to buy Twitter, and it’s taken him till past spooky season to make good on his offer. The interim’s been pretty chaotic, but a whirlwind of back-and-forths, legal challenges and defenses ultimately forced the deal through – and now the world’s richest man is on a cost-cutting crusade. Little wonder, either: markets have tumbled drastically since April, meaning it’s likely Musk seriously overpaid for the big blue bird. That’s probably only strengthening his resolve to bid adieu to 3,700 employees, half Twitter’s entire workforce.
Source: Barron’s
Why should I care?
Zooming in: Free speech, empty pockets.
Cutting costs is only one part of the solution; Twitter also needs to start generating more revenue, which may be more difficult. See, businesses are holding their pearls and stopping ad spending due to Musk's idea of Twitter as a bastion of free speech. One of the largest marketing agencies in the world, Interpublic, advised its clients to delay Twitter advertisements for at least a week, and businesses like Carlsberg and General Motors are following suit.
Musk has a brilliant idea for earning money: charging $8 a month for benefits like fewer advertisements, promoted tweets, and the blue verification tick that displays next to users' handles. Previously, only high-falutin' celebrities, politicians, and journalists could earn this badge of honor. The proposal, however, is not without drawbacks. For one, the sudden blue rubber stamping of any paying, fraudulent account could paradoxically make impersonating individuals simpler. And secondly, it can exacerbate the already existing gap between those who can and cannot pay the price by amplifying the voices of paying users at the expense of everyone else's.
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