Elon Musk told Twitter employees on Thursday that the company “needs to get healthy” financially and bring down costs, suggesting that job cuts are likely in store if his deal to buy the social media service goes through.
“Right now costs exceed revenue,” Musk said when asked about the possibility of layoffs during an internal Q&A, according to employees who heard the remarks. “That’s not a great situation.”
The question of layoffs has been top of mind for Twitter’s more than 7,000 employees since Musk first said he wanted to buy the company. Current CEO Parag Agrawal told staffers in an earlier meeting that layoffs weren’t being planned “at this time.” Though Musk didn’t explicitly say if there would be job cuts Thursday, his comments suggest the odds are high.
Musk previously indicated that Twitter would cut roles in a pitch deck shared with potential investors, according to The New York Times. The deck reportedly showed that Musk wanted to increase Twitter’s headcount in the short term, then cut around 900 jobs before resuming growth.
Twitter’s annual revenue grew last year to $5.08 billion, up from $3.72 billion in 2020. But the company is still losing money overall, even if those losses are shrinking. Twitter’s full-year losses in 2021 fell to $221 million, down from a loss of $1.14 billion in 2020. Musk has prioritized a number of revenue-focused products in his comments about future plans for Twitter, including a heavy focus on subscriptions.