(This November 10 story has been redacted to correct the pronoun from she to them in paragraph 7)
By Katie Paul and Paresh Dave
(Reuters) – Twitter Inc’s new owner Elon Musk raised the possibility of bankruptcy for the social media platform on Thursday, capping a chaotic day that included a warning from a U.S. privacy regulator and the departure of its trust and security leader. the company.
The billionaire in his first mass conversation with employees said he could not rule out bankruptcy, Bloomberg News reported, two weeks after buying it for $44 billion — a deal that credit experts say has left Twitter’s finances in a tailspin. precarious position.
Earlier in the day, in his first company-wide email, Musk warned that Twitter will not be able to “survive the next economic downturn” if it fails to grow subscription revenue to offset the decline in advertising revenue, said three people who have seen the message. Reuters.
Yoel Roth, who has overseen Twitter’s response to combating hate speech, misinformation and spam on the service, resigned on Thursday, two people familiar with the matter told Reuters.
On his Twitter profile Thursday, Roth described himself as “Former Head of Trust and Safety” at the company.
Roth did not respond to requests for comment. Bloomberg and technology site Platformer first reported his exit.
Earlier Thursday, Twitter’s Chief Information Security Officer Lea Kissner tweeted that she had resigned.
Chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty also resigned, according to an internal message posted on Twitter’s Slack messaging system on Thursday by a lawyer on its privacy team and seen by Reuters.
Robin Wheeler, the company’s top ad sales executive, told employees in a memo that she was staying at the company, a person who saw the message said, reversing earlier media reports that she too was leaving.
“I’m still here,” Wheeler tweeted late Thursday.
The US Federal Trade Commission said it was viewing Twitter with “deep concern” after its three privacy and compliance officers left. These resignations potentially put Twitter at risk of violating regulatory orders.
Musk’s lawyer, Alex Spiro, told several employees in an email late Thursday that Twitter will remain in compliance.
“We spoke with the FTC today about our ongoing obligations and have an ongoing constructive dialogue,” Spiro wrote.
He stated that only Twitter, not individual employees, could be held liable against the orders.
“I understand there have been employees at Twitter who don’t even work on the FTC case commenting that they could (go) to jail if we didn’t comply — that just doesn’t work,” he wrote.
In his first meeting with many Twitter employees on Thursday afternoon, Musk warned that the company could lose billions of dollars next year, the Information reported.
Musk added in the email to workers that remote work would no longer be allowed and that they would be expected to be in the office for at least 40 hours a week.
Twitter, Musk and Spiro did not respond to requests for comment on a potential bankruptcy, the FTC warning or the departures.
Musk moved relentlessly into a clean house after taking over on Oct. 27 and has said the company was losing more than $4 million a day, largely because advertisers started fleeing as soon as he took over.
Twitter has $13 billion in debt after the deal and faces interest payments totaling about $1.2 billion over the next 12 months. The payments exceed Twitter’s recently disclosed cash flow, which reached $1.1 billion at the end of June.
Musk has started charging $8 a month for the Twitter Blue service that will include a blue check verification.
WARNING!
“We are following the recent developments on Twitter with deep concern,” Douglas Farrar, the FTC’s director of public affairs, told Reuters.
“No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them,” Farrar said.
In May, Twitter agreed to pay $150 million to settle allegations by the FTC that it misused private information, such as phone numbers, to target ads to users after telling them the information was collected only for security reasons.
Twitter’s privacy lawyer on Thursday cited in an internal memo that Spiro had said Musk was willing to take a “tremendous amount of risk” with the company. “Elon puts rockets into space, it’s not afraid of the FTC,” the lawyer quoted Spiro as saying.
The acquisition of Twitter has raised concerns that Musk, who has often waded into political debates, could face pressure from countries trying to control online speech.
That prompted US President Joe Biden to say on Wednesday that Musk’s “collaboration and/or technical relationships with other countries are worth watching.”
ADVERTISERS NOT DISCLAIMER
Musk told advertisers on Wednesday, speaking at Twitter’s Spaces feature, that he aimed to turn the platform into a force for truth and stop fake accounts.
His insurance may not be sufficient.
Chipotle Mexican Grill said Thursday it was pulling its paid and owned content from Twitter “while we gain a better understanding of the direction of the platform under its new leadership.”
He joined other brands, including General Motors, that have stopped advertising on Twitter since Musk took over, worried that he will loosen content moderation rules.
(Reporting by Katie Paul in Palo Alto, Calif. and Paresh Dave in Oakland, Calif.; Additional reporting by Jeffrey Dustin in Palo Alto, Diane Bartz in Washington, Yuvraj Malik in Bengaluru and Fanny Potkin and Hyunjoo Jin; Shounak Dasgupta, Bill Berkrot, Depae Babington and Sam Holmes)
