As Elon Musk Cuts Prices at Twitter, Some Payments Are Going Unpaid

Mr. Musk and his advisers are inspecting all forms of bills at Twitter. Some of the social media firm’s distributors have gotten stiffed.

SAN FRANCISCO — Before Elon Musk bought Twitter final month, the corporate’s executives had racked up a whole lot of hundreds of {dollars} in journey invoices that the social media service deliberate to pay.

But as soon as Mr. Musk took over the corporate, he refused to reimburse journey distributors for these payments, present and former Twitter staff stated. Mr. Musk’s workers stated the companies have been licensed by the corporate’s former administration and never by him. His workers have since prevented the calls of the journey distributors, the individuals stated.

Mr. Musk has launched into an infinite cost-cutting marketing campaign since closing his $44 billion acquisition of Twitter. He initially slashed half of the corporate’s 7,500-person work power, fired staff and continued with layoffs as just lately as Monday. But he has additionally performed a sweeping examination of all forms of different prices on the firm, instructing workers to evaluation, renegotiate and in some circumstances not pay Twitter’s outdoors distributors in any respect, eight individuals with data of the matter stated.

Mr. Musk and his advisers have skilled their sights on computing prices that help Twitter’s underlying infrastructure, journey bills, software program companies, actual property and even the corporate’s usually lavish in-office cafeteria meals. Twitter’s spending has dropped, however the strikes have spurred complaints from insiders — in addition to from some distributors who’re owed hundreds of thousands of {dollars} in again funds.

Mr. Musk’s actions reflect the financial pressure that Twitter is underneath. The firm took on $13 billion in loans for his buyout of the social community. The curiosity funds for that debt totals greater than $1 billion yearly. And Twitter has lengthy confronted monetary difficulties, usually shedding cash and struggling to maintain up with rivals like Facebook and Google that successfully monetized their promoting merchandise. Some advertisers have paused spending on Twitter as they consider Mr. Musk’s possession.

Mr. Musk, 51, has told Twitter employees that “the financial image forward is dire” and that chapter is perhaps within the playing cards for the corporate.

He didn’t reply to a request for remark.

Mark Ralston/Agence France-Presse — Getty Images

Twitter’s previous leaders tried to get the corporate to profitability by totally different methods, from pushing dwell video to a spate of audio choices. Mr. Musk’s plan was extra austere. He brought in allies from his different firms — together with Antonio Gracias, a longtime confidant and former director of the electrical carmaker Tesla; Jared Birchall, the pinnacle of Mr. Musk’s household workplace; and Steve Davis, who leads Mr. Musk’s tunneling mission, the Boring Company — to pore over Twitter’s books.

Their directive was easy: Cut, reduce, reduce.

That helped result in the mass layoffs at Twitter this month. And behind the scenes, no bills are off the desk.

Twitter’s finance workers, which has been drastically decreased, have been instructed to comb by firm bills and worker expense experiences “line by line,” individuals with data of the matter stated. They have been requested to particularly be sure that staff and their bills are for “actual individuals and actual bills,” they stated.

Mr. Musk additionally issued an order to sluggish or in some circumstances halt transfers of funds to Twitter’s distributors and contract companies, the individuals stated. Any expenditures for companies have to be authorised by Mr. Birchall, three individuals stated. Mr. Musk has since declined to pay for the journey companies incurred by the previous Twitter executives, the individuals stated.

He can be trying on the firm’s leases for workplace area, three individuals stated, bucking on making funds and hoping to renegotiate or decide out of some commitments completely. Twitter leases workplace area the world over, however the layoffs have decreased the necessity for a lot of that actual property.

Twitter’s partnerships group was additionally instructed to renegotiate its multiyear content material offers with main sports activities entities, like one it struck with the N.F.L. by which the social media firm pays the league to provide unique audio and video content material for its platform, two individuals acquainted with the plans stated. Twitter has struck similar deals with different media firms, together with Condé Nast, the N.B.A. and Fox Sports Network.

An N.F.L. spokesman didn’t instantly have a remark.

David Richard/Associated Press

Mr. Davis, the president of the Boring Company, has additionally directed Twitter staff to renegotiate the offers that the corporate has with companies reminiscent of Amazon and Oracle, which give computing and tech companies, the individuals stated. The staff have been advised to recommend to these firms that Mr. Musk’s companies wouldn’t work with them sooner or later in the event that they refused to renegotiate, the individuals stated.

After Twitter’s contract with one software program vendor expired underneath Mr. Musk’s possession, that firm voided a reduction it had given to Twitter, one engineering supervisor stated.

Representatives for Amazon and Oracle didn’t reply to requests for remark. An e-mail to the Boring Company was not instantly returned.

Corporate bank cards for Twitter staff have additionally been shut off, three of the individuals stated. One employee stated she tried to purchase farewell drinks for colleagues after the mass layoffs, solely to have her company bank card declined on the bar.

When Mr. Musk referred to as for Twitter staff to return to the corporate’s San Francisco workplaces final week to satisfy with him, some staff stated they have been involved about reserving the journey on their private bank cards and feared not getting reimbursed. Under Mr. Musk’s possession, Twitter has delayed paying or has denied expense experiences that have been submitted for approval, 4 present and former staff stated.

Mr. Musk has ended different longtime perks at Twitter. He has reduce free lunches, which he stated was costing the corporate more than $400 “per lunch served.” (One worker who labored on the corporate’s lunch program disputed Mr. Musk’s math.) In Twitter’s New York workplace on Monday, the cafeteria, which as soon as had objects like grilled shrimp, served two forms of macaroni and cheese, together with a salad bar, one individual stated.

Other advantages, like sponsored fitness center passes, cellphone and web payments, in addition to youngster care stipends, have additionally been trimmed, two individuals stated.

Apu Gomes/Agence France-Presse — Getty Images

Mr. Musk’s group, together with his private lawyer Alex Spiro, have ended Twitter’s ties with some outdoors regulation companies that labored with the corporate’s former administration in a lawsuit over the $44 billion buyout, one individual acquainted with the transfer stated. Earlier this 12 months, Twitter sued Mr. Musk after he tried backing out of his settlement to purchase the corporate.

Mr. Spiro didn’t reply to a request for remark.

Some of Twitter’s social tasks have additionally began throwing in the towel. The firm’s philanthropic division, Twitter for Good, has misplaced many staff and checks promised to some nonprofit teams haven’t been obtained, two individuals stated. The San Francisco Standard earlier reported on Twitter’s philanthropy points.

“Elon has proven that he cares solely about recouping the losses he’s incurring on account of failing to get out of his binding obligation to purchase Twitter,” one worker wrote on Twitter’s inner Slack messaging system this month.

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