Twitter owner and CEO Elon Musk is painting a bleak picture of the companyâs financial situation.
During an interview on Twitter Spaces, the billionaire voiced optimism about Twitterâs financial prospects for 2023.
However, he described the finances from before his takeover as a burning plane crash.
âBecause of the nature of this transaction where thereâs $12.5 billion of debt and the Fed rate has been going crazy, thereâs on the order of a billion and a half-ish of debt servicing thatâs required,â Musk began as he explained the company was on track to lose $3 billion in the next year.
He explained the financial situation is why he âspent the last five weeks cutting costs like crazy.â
Listen to his comments below:
Musk also shared he has been working on getting advertisers to help boost revenue:
âIâve spoken to a number of the advertisers. Their requests are not fuzzy or irrational or anything. Theyâre, like, quite reasonable. Theyâre like, just show us an ROI that makes sense. And Iâm like, yes, I agree. If I were in that position, I would also want an ROI that makes sense, especially when weâre headed into difficult economic times where these questions are asked a lot more than in prosperous times.â
After acknowledging why advertisers may be hesitant to advertise on Twitter, he said, âWith the changes that weâre making here on massively reducing the burn rate and building subscriber revenue, I now think that Twitter will, in fact, be okay next year.â
âI think we will be ⌠hopefully cash flow break-even. Thatâs what I expect for next year. But this will be difficult,â he continued. âSo thatâs the reason for all of my actions, though they may seem sometimes spurious or odd or whatever, itâs because we have an emergency fire drill in our hands.â
Finally, he added, âBut if ⌠youâre looking at it from my standpoint and youâre saying, okay, wow, this company is like basically youâre in a plane that is headed towards the ground at high speed with the engines on fire. And the controls donât work.â
Musk completed his $44 billion purchase of Twitter in October and swiftly made changes to the company, including firing its top executives.
He also laid off nearly half of the companyâs 7,500 employees.
On top of decreasing the staff size, Musk relaunched the companyâs Twitter Blue subscription plan for $8 per month or $11 for users who paid for it through Appleâs App Store.