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Twitter could go bankrupt just a few weeks after the social media company was taken private by billionaire Elon Musk in a blockbuster deal worth $44 billion. The Chief Executive of the social media company, as well as of Tesla Inc (NASDAQ:TSLA) and SpaceX, told employees that he cannot rule out bankruptcy, according to The Information and Platformer.
Musk told staff that Twitter is unlikely to “survive the upcoming economic downturn” if it fails to offset almost disappearing advertising income. The billionaire previously said on Twitter that his company is losing nearly $4 million a day. Musk is pushing staff to make its $8 subscription product go live as soon as possible.
His comments come at a very difficult moment for Twitter, which has been hit by massive staff layoffs since Musk took over. The talent situation got much worse on Thursday when some of Twitter’s key senior executives resigned, including Yoel Roth, who was leading the company’s efforts in combating hate speech, misinformation, and spam on the service.
Lea Kissner and Robin Wheeler also left Twitter. Kissner was Twitter’s Chief Information Security Officer while Wheeler acted as VP of Sales. Several other senior executives also left the company on Thursday.
The departures come after the U.S. Federal Trade Commission (FTC) said it is monitoring Twitter developments with “deep concern” after key executives left the company. Musk’s attorney Alex Spiro, who is also involved in day-to-day operations at Twitter, confirmed talks with the FTC.
“We spoke to the FTC today about our continuing obligations and have a constructive ongoing dialogue,” he said.
“I understand that there have been employees at Twitter who do not even work on the FTC matter commenting that they could (go) to jail if we were not in compliance – that is simply not how this works.”
Musk previously ended the practice of remote work at Twitter and ordered all staff to return to the office.
