[Asia Economy Reporter Jeong Hyunjin] Elon Musk, CEO, is reportedly applying a strategy that demands intense and long working hours, insisting employees must become 'hardcore' amid bankruptcy threats, not only at Tesla and SpaceX but also at Twitter following his acquisition of the social networking service (SNS). After laying off half of the staff post-acquisition, he further dismissed employees in the sales division on the 21st (local time). Within less than a month since the acquisition, Twitter's workforce has shrunk from about 7,500 to approximately 2,700 employees.
◆ The 'Word' Used Also at Tesla and SpaceX
Since Musk's acquisition of Twitter, his actions?mass layoffs, mentioning the possibility of bankruptcy, and telling employees to 'become hardcore'?are seen as a repetition of tactics he previously employed at other companies. On the 21st (local time), The New York Times (NYT) cited multiple sources who worked at Musk's companies, stating, "What Musk did at Twitter is what he did at Tesla and SpaceX," and "Musk repeatedly uses the same approach across his companies."
In a past NYT interview, Musk recalled that in 2018, his company was on the brink of bankruptcy, and he lived at the Tesla factory, saying, "It was very painful. There were days I didn't go outside for 3 to 4 days." NYT reported that Musk's so-called 'Tesla production hell' experience is becoming the blueprint for Twitter. In December 2008, during the global financial crisis, he also warned Tesla employees that "this could be the last," referring to the possibility of bankruptcy.
Professor Tammy Maddison of Santa Clara University commented that Musk seems to be applying the methods he used at Tesla and SpaceX to Twitter, but it is unclear whether he has found a way to motivate Twitter employees. Maddison noted, "At Tesla and SpaceX, despite high risks, the approach involved significant rewards," adding, "At Twitter, the risks are high, but it is questionable what rewards might come."
According to the NYT report, in 2017, a former SpaceX executive revealed that Musk used the threat of bankruptcy as motivation, telling SpaceX employees that if rockets were not launched every two weeks, the company would face bankruptcy. In December last year, Musk also warned that SpaceX could go bankrupt due to a severe economic downturn and tightening financial markets.
Two former Tesla executives told the NYT that Musk creates a crisis atmosphere and holds himself to strict standards, which helps him address dramatic company changes and mass layoffs. They added that this situation prepares remaining employees to work in extreme environments. Several executives who worked at Tesla and SpaceX pointed out that while Musk's strategy sometimes inspires, it ultimately hardens the company culture, leading to an environment of fear and scapegoating.
◆ Additional Layoffs in Sales Division Following Musk's Emphasis on 'Twitter 2.0'
Musk's strategy of instilling fear has surfaced repeatedly since acquiring Twitter. After laying off half the employees, Musk reportedly began notifying some sales division employees of layoffs late the previous afternoon. One employee told The Wall Street Journal (WSJ) that they received an email early that morning informing them of their termination, stating, "Your role is no longer needed."
Bloomberg reported that Twitter's sales employees were more likely than those in the technical division to say they would stay at the company when Musk demanded on the 16th, "If you are not going to work intense and long hours, leave." Multiple sources explained that Musk conducted additional layoffs in the sales division to balance staffing across departments.
The number of employees laid off in this additional round has not yet been disclosed. However, Bloomberg cited an internal source stating that the remaining staff count is 2,750, meaning nearly 5,000 of the approximately 7,500 Twitter employees before Musk's acquisition have left. Within a week after Musk finalized the acquisition on the 27th of last month, 3,700 employees?half the workforce?were laid off, and with engineers and others leaving subsequently, fewer than 3,000 employees remain.
Recently, Twitter executives have also been resigning one after another. Robin Wheeler, Twitter's head of marketing and sales, who Musk had asked to stay, was laid off on the 18th, and Sarah Rosen, former head of U.S. content partnerships, announced her resignation on the 20th via her Twitter account. Rosen wrote, "It took me days to say goodbye after spending 8.5 years at Twitter. Twitter 1.0 was good," indirectly criticizing Musk, who heralded Twitter 2.0.
This atmosphere is spreading not only in the U.S. but worldwide. Damien Viel, head of Twitter's France branch, tweeted "It's over" on the same day, announcing his resignation.
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