Elon Musk has owned Twitter for a few weeks now, but it isn’t hyperbole to call his tenure there “interesting.” Unable to back out of the $44 billion purchase, Musk quickly made the company private, fired top executives, and laid off roughly half of Twitter’s employees. However, that decisiveness has yet to show dividends, leaving some to question whether Musk has any concrete plans for the social networking giant.
Musk attributed the need to downsize staff to daily financial loss of $4 million per day.
Immediately following Musk’s takeover, the usage of racial slurs on Twitter dramatically increased, likely emboldened by Musk’s claims of being a free speech absolutist.
This was quickly overshadowed by Musk’s announcement of paid verification. Under the old verification system, there were several qualifications and requirements to get verified status. This led to a level of trust that verified accounts were who they said they were.
This $8 subscription price became the number Musk pushed, often comparing it to a Starbucks coffee.
Throughout all of this, Twitter began bleeding advertisers. Many chose to pause ad campaigns on Twitter, citing concern about the volatility on the platform.
“I understand if people want to give it a minute and see how things are evolving,” Musk said. “But really, the best way to see how things are evolving is just use Twitter. And see how your experience has changed. Is it better? Is it worse?”
Despite the criticism, Twitter pushed paid verification live to users. Individuals and brands were quickly impersonated by those paying for verified status. One particular user impersonated pharmaceutical company Eli Lilly, tweeting that insulin was now free, causing their stock to plummet.
Several “verified” accounts for Musk, the Pope, Donald Trump, Nestle, and many others quickly popped up, prompting Musk and Twitter to halt the new verification system. Twitter even began banning those impersonating Musk.
Musk has recently tweeted that “Far too many corrupt legacy Blue “verification” checkmarks exist, so no choice but to remove legacy Blue in coming months,” implying the old system was no better than his paid one.
Far too many corrupt legacy Blue “verification” checkmarks exist, so no choice but to remove legacy Blue in coming months
— Elon Musk (@elonmusk) November 10, 2022
In a message to employees, Musk ended remote work for everyone able to return to the office and stated that bankruptcy was a possibility.
Twitter isn’t the only tech company struggling right now. The five highest valued US tech companies have lost $3.4 trillion in combined value this year. For reference, this is almost the estimated GDP of India: the fifth highest GDP globally.
Amazon recently became the first publicly-traded company to lose $1 trillion in market valuation, according to Bloomberg.
Meta, Facebook’s parent company, dropped out of the top 20 most valuable US at the end of October and announced on Nov. 9 that it would be laying off 11,000 employees: 13% of its workforce. This is Meta’s largest layoff in the company’s 18-year history.
“I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected,” Meta CEO Mark Zuckerberg wrote in a message to employees. “I got this wrong, and I take responsibility for that.”
Regardless of what, if any, this responsibility would be, part of this can likely be pinned on Zuckerberg’s near-obsession with the Metaverse, Meta’s virtual reality space. It was revealed at the end of October that Meta has sunk over $36 billion into the Metaverse with arguably very little to show for it.
“Right now, Reality Labs, which is the division of Meta that’s really focused on the metaverse, is losing billions of dollars every quarter,” NPR Tech Reporter Bobby Allyn said on “All Things Considered.” “Analysts I’ve talked to say this is a high-risk gamble that Zuckerberg is really pinning his legacy on. If it pans out, these money-losing bets could be seen as really smart. But if virtual reality headsets never become mainstream, guess what? The company is in for some more trouble ahead.”
The headsets are an area Reality Labs is working on and the R&D is obviously part of the cost. Adam Savage’s Tested, of Discovery’s Mythbusters fame, featured some of Meta’s prototypes in an episode earlier this year. That said, VR currently faces a number of hurdles: the cost, limited use, and bulky headsets and wires to name a few. On the software side, there are many who point to a free game, VRChat, as having more working features than the Metaverse.