Twitter Announces Hiring Freeze, Ousts Top Execs as Elon Musk Announces His Bid is 'On Hold'
Twitter shares went tumbling over 7.5% early Friday.
Looks like another bump in the road for the contentious takeover of Twitter by Elon Musk.
The billionaire, who became the majority shareholder of Twitter last month after purchasing about 10% of the company's shares, put in an estimated $44 billion bid to buy out the company in an all-cash deal that's expected to close by the end of 2022.
But now it looks like the deal is "on hold" following Twitter's disclosure via the company's Q1 2022 earnings report, which claimed that Twitter bots and spam accounts account for less than 5% of total users on the site.
"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk wrote to his 92.7 million followers, linking to a Reuters article from earlier this month that cited Twitter's estimated data. "Still committed to acquisition."
Still committed to acquisition— Elon Musk (@elonmusk) May 13, 2022
Per the report, Twitter acknowledged that there is a major problem with fake and spam accounts on the platform but noted that estimates of how much these accounts account for on the site are not completely accurate.
Related: Twitter CEO Issues Warning That Musk's Latest Poll Will Have 'Consequences': 'Please Vote Carefully'
"We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter," the company explained. "In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our mDAU, and have made improvements in our spam detection capabilities that have resulted in the suspension of a large number of spam, malicious automation, and fake accounts."
Musk has made eliminating bots and spam accounts a major part of his platform of proposed change for the company.
Earlier this month at the Met Gala, the billionaire spoke with the Associated Press in a red carpet interview about making Twitter the most "trusted as possible" as a social media platform.
"I've also vowed this publicly that we have to get rid of the bots and trolls and the scams and everything, because that's obviously diminishing the user experience, and we don't want people getting tricked out of their money and that kind of thing," Musk said. "I'm definitely on the warpath, so if somebody's operating a bot or troll on me then I'm definitely their enemy."
Related: Elon Musk Said He Isn't Worried About Twitter Employees Quitting
Musk's news about the bid hold comes one day after Twitter announced a hiring freeze and the surprise departure of two top executives — Kayvon Beykpour (general manager of consumer) and Bruce Falck (revenue product lead.)
"Effective this week, we are pausing most hiring and backfills, except for business critical roles as determined by Staff members in partnership with their HRBPs. We will also be reviewing all extended offers to determine criticality and those that should be pulled back," Twitter CEO Parag Agrawal wrote in a memo to employees. "We are not planning company-wide layoffs, but leaders will continue making changes to their organizations to improve efficiencies as needed. As always, performance management will continue to be a priority at this time at all levels to ensure we have the strongest teams possible."
Agrawal also touched on the departure of Beykpour and Falck, commending them on their hard work, but according to a Tweet from Beykpour, it does not seem that the executives' departures were at all voluntary or amicable.
"The truth is that this isn't how and when I imagined leaving Twitter, and this wasn't my decision," Beykpour wrote. "Parag asked me to leave after letting me know that he wants to take the team in a different direction."
Agrawal's memo also touched on budgetary concerns, announcing that the company would be cutting non-labor costs including contractor, consulting and travel expenses.
"Please continue to treat Twitter's resources as you would your own, and manage tightly to your budgets, prioritizing what matters most," he urged.
Twitter shares were plummeting over 7.5% as of late Friday morning.
Related: Report: Elon Musk to Serve as Interim Twitter CEO Before Deal Closes