BNR – Twitter has lost nearly 50% of the advertisement gains after the renowned multi-billionaire took over last October. Elon Musk bought the text-based social media firm for $44bln.
Musk stated that the firm had failed to achieve the sales that were projected for June. However, he said that July may be more “promising.”
The Twitter current owner and former CEO has dismissed nearly half of the company’s employees, accounting for 7,500 employees. The event occurred in 2022, when Musk completed the acquisition of Twitter, and aimed at cutting expenditure.
Threads App Surges
Twitter’s competitor platform, Threads, now has over 150m users, according to several sources. The new application is directly integrated with Instagram, the image-based Meta application. Therefore, Threads gained access to a huge database of users who can easily join it.
At the same time, Twitter is fighting a hefty debt, as cash flows remain in the negative, according to Musk. However, the multi-billionaire did not indicate a specific time as to when the 50% drop in ad revenue occurred.
The Twitter owner tweeted, “Need to reach positive cash flow before we have the luxury of anything else.”
Lucy Coutts, investment director at JM Finn said she believed Elon Musk could change the platform completely. “But unfortunately, he has got $13bn of debt to pay by the end of July,” she added.
Moreover, Musk is the CEO and biggest shareholder of the electric vehicle manufacturer, Tesla. The EV company will issue its quarterly revenue this Wednesday.
After firing an abundance of staff members and reducing cloud services, Musk stated that Twitter is projected to make $3bln in profit in 2023. It is noteworthy that the platform made over $5bln in profit in 2021.
Twitter Failed Cutting-Costs Plan
Musk’s major dismissal campaign has failed to retain advertisers who left the platform due to concerns over content moderation bylaws.
The development is the latest sign the aggressive cost-cutting measures have not been enough to ignite a return of advertisers who fled after changes to its content moderation rules.
The Tesla CEO hired Linda Yaccarino, former head of advertising at NBCUniversal, to become CEO of Twitter in June. The move indicates that ad revenue remains a top priority for Twitter. Yaccarino stated that Twitter aims to concentrate on video graphic content, creators and commercial collaborations.