Deep cuts

Hi, it’s Max in New York. Elon Musk has a track record of building successful, world-changing companies. So why does it seem like he’s sabot [View in browser]( [Bloomberg]( Hi, it’s Max in New York. Elon Musk has a track record of building successful, world-changing companies. So why does it seem like he’s sabotaging Twitter? But first... Today’s must-reads: • Tech companies are [announcing sweeping layoffs]( • Apple [has paused hiring]( outside of research and development • Twitter is [losing advertisers]( Improve your inbox: Sign up for our new [Cyber Bulletin]( weekly newsletter. Chief twit Elon Musk is, by temperament and by his own telling, an entrepreneur—or to use the formulation preferred by Silicon Valley’s capital class, a builder. This is deserved: Musk, through his abilities as a product designer, engineer and gonzo marketer, has popularized electric cars while creating a company, Tesla Inc., that employs around 110,000 people. He’s pulled a similar trick, albeit on a smaller scale, at Space Exploration Technologies Corp., which has pioneered private space launches and now employs something like 12,000. Musk’s undeniably impressive track record is one thing that made the psychodrama that is the $44 billion buyout of Twitter so strange. Having gotten rich and famous employing tens of thousands of people, Musk is now gleefully preparing to fire about 3,700 of them, according to a [scoop yesterday by my colleagues]( Ed Ludlow and Kurt Wagner. In a [memo to employees]( Thursday, the company said it would tell staffers whether or not they still had a job via email by Friday at 9 a.m. The cuts follow purges of the company’s board of directors—Musk is the sole director now—and the executive suite, whom he seems to have replaced with a shadow managerial team that includes his lawyer and money manager. Mystifyingly, Musk’s friends, the tech investors and podcasters Jason Calacanis and David Sacks, are also now involved in running Twitter. Existing staffers, meanwhile, have been trapped in a state of excruciating limbo. Twitter’s workforce [has yet to hear from Musk directly]( and have instead been reduced to parsing the tweets of Musk, Calacanis and others—while turning to the anonymous social network Blind to try to figure out whether they’ll have jobs in a week. Some, probably in a desperate attempt to stave off a random “[rage-firing](,” [are sleeping at the office](. Musk’s plan to get through this chaos seems to be to radically cut costs while creating a new revenue stream, charging users $8 a month to get a blue “verified” emoji next to their names. With a net worth of close to $200 billion, Musk is the world’s richest man. And yet somehow he is spinning this as a man-of-the-people move: “Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark is bullshit,” he tweeted Nov. 1. “Power to the people Blue for $8/month.” The plan to charge $100 a year or so for something that was originally designed to keep scammers from trying to impersonate celebrities, politicians and journalists has been mocked for a number of good reasons: It’s an awkward value proposition; it probably won’t generate much revenue; and it could make spam and scams worse. There’s something especially distasteful about a chief executive (or [chief twit, or whatever]() preparing to fire half the company while crowing “power to the people!” Moreover, while Twitter would certainly be laying off employees with or without Musk—Stripe and OpenDoor are the [latest tech darlings]( [to fall on hard times](—Twitter’s position is much more tenuous that it otherwise would have been because of Musk’s antics. To finance the buyout, Musk has saddled the company with $13 billion in debt, which will mean annual payments of around $1 billion a year in interest, or one-fifth the company’s 2021 revenue. It’s unclear how much Musk’s public hostility toward the platform has already eaten into that number. His promise not to turn the site into a “free-for-all hellscape” notwithstanding, his promotion of a far-right conspiracy theory (which he later deleted, blessedly) and his tweets of solidarity after Kanye West’s antisemitic outburst (also deleted) seem to send the opposite message. [Advertisers]( [have taken notice](. Part of the problem, I think, is that Musk is trying, on the fly, to master a private-equity style turnaround—which means taking on debt, radically cutting costs, and finding ways to wring revenue out of existing lines of business. At the same time he is, as ever, trying to play to his fans, please his new right wing friends, and, somehow, not screw up Tesla or SpaceX—all of it amid a weak economy, an unsteady stock market, increased competition from rival automakers, [a federal criminal investigation]( and a precarious political environment. Something’s gotta give. —[Max Chafkin](mailto:mchafkin@bloomberg.net) The big story A Bloomberg investigation revealed that political candidates who have pushed the falsehood that the 2020 election was stolen routinely saw their posts [collecting more engagement]( than average. And in many cases, social media companies—which have alerted users about election falsehoods in the past—aren’t adding context to misleading posts. Get fully charged Stripe, one of the world’s most valuable startups, will [cut more than 1,000 jobs]( as it seeks to rein in costs ahead of any economic downturn. PayPal users’ spending growth is [slowing down](. Lyft is cutting 13% of staff to cope with “[tough reality](.” Amazon is pausing “new incremental” hiring across its [corporate workforce](. [Sign up for Cyber Bulletin](, our new weekly newsletter on cybersecurity, for exclusive coverage inside the shadow world of hackers and cyber espionage—and how businesses are playing defense. Follow Us More from Bloomberg Dig gadgets or video games? [Sign up for Power On]( to get Apple scoops, consumer tech news and more in your inbox on Sundays. [Sign up for Game On]( to go deep inside the video game business, delivered on Fridays. Why not try both? Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights.​​​​​​​ You received this message because you are subscribed to Bloomberg's Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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