Musk will lay off 75% of employees after being exposed to Twitter, and Twitter denies that there is no layoff plan.

Tesla CEO Elon Musk’s plan to buy Twitter may not be good news for Twitter employees.

On October 20th, local time, Washington post quoted people familiar with the matter and a document as saying that Musk planned to reduce the number of Twitter employees from 7,500 to more than 2,000 in the next few months.

In other words, Twitter needs to cut nearly 75% of its employees.

The report quoted people familiar with the matter as saying that after months of legal disputes, Musk’s planned acquisition of $44 billion is progressing in an orderly manner and is likely to be completed before October 28.

In a memo to employees after Washington post’s report, Twitter General Counsel Sean Eichette warned employees that as the transaction drew to a close, there were expected to be "a lot of public rumors and speculations". "Since the merger agreement has been put in place, there are no plans to lay off employees throughout the company," he said.

In fact, as early as April this year, Bloomberg quoted people familiar with the matter as saying that Musk had told investors that he planned to lay off Twitter when he first sought funds from the bank.

However, reports in Washington post show that even if the deal between Musk and Twitter fails, the current management of Twitter plans to cut the company’s salary by about $800 million by the end of next year, which means that the company needs to fire nearly a quarter of its employees. At the same time, Twitter also plans to drastically cut its infrastructure spending, including a data center that keeps the website running normally for more than 200 million users who log in every day.

Washington post said that this change may have a significant impact on Twitter’s ability to control harmful content and prevent data security crisis in the future.

Edwin Chen, a data scientist who was in charge of Twitter spam and health indicators, said that millions of Twitter users may immediately feel the impact of such layoffs. He said that although he believes that Twitter currently has too many employees, the layoffs proposed by Musk are unimaginable, which will expose Twitter users to multiple risks such as hacking.

In the third quarter earnings conference call held by Tesla on Wednesday, Musk said that he had paid too much for Twitter: "Although it is obvious that myself and other investors have paid too high a price for Twitter now, in my opinion, the long-term potential of Twitter is one order of magnitude higher than its current value."

According to Washington post, the extent of layoffs exposed this time explains why Twitter executives are eager to sell the company to Musk — — Although Musk’s $44 billion bid is full of "hostility" and keeps swinging in the middle, it is tantamount to a cash check for this troubled social media company.

Months of bidding and a tense legal battle have left Twitter scarred. At present, Twitter is facing serious staff turnover, slow recruitment, project stagnation and stock price fluctuation.

Dan Ives, a financial analyst at Wedbush Securities, said: "It is easy for Musk to acquire Twitter, but the difficult thing is to fix it. Reversing this situation will be an arduous challenge. "

According to Washington post, according to interviews and documents, reshaping Twitter’s workforce is an important part of Musk’s ambition. Musk believes that significantly reducing the size of the company is the first step in implementing the strategy of turning losses into profits, which will then involve introducing more efficient employees and innovations, such as expanding the subscription business, that is, allowing users to pay for exclusive content provided by influential accounts.

Musk had previously told investors that he planned to double his income within three years and triple the number of daily users who watched advertisements in the same period, but he did not elaborate on how to achieve these goals.

However, people familiar with the matter also said that according to Twitter data, subscription may not bring new considerable income, because the users who watch advertisements the most on Twitter are about 1% of the number of users in the United States, which is also the most likely user to join the subscription service. If they start paying monthly, this plan may eat into the most profitable part of Twitter’s current advertising business.

The report also shows that Twitter’s human resources personnel told employees that they did not intend to lay off employees on a large scale, but the document shows that before Musk proposed to acquire the company, there had been a large number of plans to lay off employees and cut infrastructure costs. Then, on the basis of these plans, Musk will first target people with poor performance and then lay off employees at other stages.

According to Nell Minow, a business management expert, Musk may need to "sell" his ambitious plan to potential investors, but the implementation of his plan will face challenges. "He must prove that what will happen next after layoffs? What will he replace (Twitter’s original data security capabilities)? Artificial intelligence? " Nell Minow said.

As of the close of US stocks on October 20th, Twitter rose 1.18% to close at $52.44, with a market value of $40.1 billion.