Toni Dimaano Tech 11.10.2022 20:Nov PM EST

Twitter Could File For Bankruptcy, Elon Musk Tells Staff

With Elon Musk's takeover of Twitter going shakier than ever, the CEO reportedly told employees that the company could go bankrupt in the next year.

In an emergency meeting called by Twitter's new owner on Thursday, he announced that bankruptcy can not be ruled out when talking about Twitter's future.

Twitter Seems To Be Going Through A Rough Patch

The talk about the company's possible bankruptcy by 2023 follows the exit of some executives, and the alterations Musk wanted to implement on the social network, Gizmodo writes.

Just recently, the CEO's plan to offer verification badges to anyone for an $8/month subscription has drawn criticisms from analysts, celebrities, and members of the public.

With this, a surge of trolls spreading misinformation and posting offensive tweets took over Twitter, abusing its promise of freedom of speech.

Furthermore, a number of big advertisers like Volkswagen and General Mills have either paused or pulled out all of their advertising campaigns on the platform as concerns about content moderation rise.

Last week, Musk also called for mass layoffs of Twitter staff and executives, telling them that those who can not work for 40 hours onsite should file for resignation.

According to Yahoo Finance, a sum of about 3,700 employees, or roughly 50% of the social media site's workforce had been let go.

Twitter's chief information security officer Lea Kissner, head of ad sales Robin Wheeler, and head of trust and safety Yoel Roth were among those who have left the company.

Additionally, the social network's chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty have also filed for resignation as reported by the New York Post.

Moreover, Musk has also fired former CEO Parag Agrawal, leaving the company with not enough people to monitor complaints and regulations.

Because of this, the US Federal Trade Commission expresses its deep concern for the company as it might go into bankruptcy by putting itself at risk of violating regulatory orders.

Musk Is Allegedly Not Scared Of Going Bankrupt

While the FTC warns Musk and Twitter that they must follow their concern decrees and revised consent orders, the billionaire is reportedly unbothered by the risks.

According to the New York Post, Twitter's privacy team legal chief Alex Spiro says that the CEO is willing to take a chance on the company no matter what.

While bankruptcy might be a last-ditch effort for some companies, Business Insider writes that it might actually be a good thing for Twitter since it is loaded with debt upon Musk's $44 billion purchase of it.

Filing for bankruptcy will give the CEO a chance to cut its debt load and lower its interest payments, which could end up with Musk owning less of Twitter.

At the moment, the company has a debt of more than $10 billion, which can be a struggle for Twitter to meet these obligations since some advertisers have already pulled their support for the company.

Business Insider writes that Musk does not shy away from these consequences as seen from the way he dealt with the same issues with his electric car company Tesla.