Twitter Inc. has told its workers that they may get only half of their annual performance bonus as the company’s financials are in a bad shape, The New York Times said in a report. At present, Twitter is engaged in a legal battle to get Tesla CEO Elon Musk to complete his $44-billion purchase deal of the social media platform, which he had agreed to in May. According to the report, the company’s revenue has gone down for the first time since 2020 and is in a net loss.
The social media platform generally depends on advertisers for their revenue. The advertisers are under pressure due to various geopolitical and economic reasons, such as the Russia-Ukraine war, Musk’s deal, and others. The company's monthly daily users had risen to 237 million in July but they incurred a net loss of $270 million, which was much lower than expected.
In an email on August 19, Chief Financial Officer Ned Segal told the employees that the present challenges might affect their annual bonuses, and they may just get 50 per cent of the total if the company can swim through the troubled waters and meet its financial targets. The report stated that the figure can further rise or fall depending on Twitter’s earnings in the coming quarters. Like many companies, Twitter gives out annual performance bonuses against its earnings and profit goals.
As per reports, Twitter has slashed its spending amid rising inflation and economic woes in recent months, and also slowed its hiring process to move ahead in a cost-effective manner.
Musk’s deal: To be or not to be
In April, Musk bought a 9.2 per cent stake in Twitter, which made him the largest shareholder. Following which, Twitter CEO Parag Agrawal declared that Musk will join the Twitter board.
On April 14, the Tesla CEO confirmed that he is ready to buy Twitter, which is worth $41.39 billion, for $54.20 per share. After a gruelling tender process, the deal was closed at $44 billion.
But the deal ran into trouble after Musk pointed out discrepancies over the issue of spam-bot accounts on the platform.
In July, it was revealed that the Tesla CEO was planning to back out of the deal. In reply, Twitter lodged a case against Musk. The matter will be heard at the Delaware Chancery Court on October 17.