Twitter owner and CEO Elon Musk fired former high-level Twitter executives “for cause,” in a bid to avoid paying their severance packages, according to tech-sector focused news outlet The Information.
While the exact cause for firing these executives is unknown, Musk has publicly stated in the past that he believes the company was managed poorly, The Information reported. Affected executives include former CEO Parag Agrawal, CFO Ned Segal and legal, policy and trust head Vijaya Gadde, who were set to make roughly $122 million in severance packages collectively, Reuters reported.
These executives “should be getting these (severance) payments unless Elon Musk had cause for termination, with cause in these cases usually being that they broke the law or violated company policy,” Courtney Yu, director of research at data analytics firm Equilar, told Reuters.
While the former executives have not yet made any public moves in response, they are weighing their options, the Wall Street Journal reported.
Following Musk’s acquisition of the company, Twitter is expected to pay roughly $1 billion per year in interest on its debts, up from just $50 million last year, after Musk took on about $13 billion in debt to acquire the company, the New York Times reported. Since the social media giant only generated $630 million last year to spend on debt, Musk will likely have to cut costs as ad revenue has declined across the tech sector.
Parag Agrawal was set to receive $57.4 million, former chief financial officer Ned Segal was to get $44.5 million, and former head of legal policy, trust and safety Vijaya Gadde was to receive $20 million, per WaPo.
Read more details: https://t.co/2KcLauClLA
— unusual_whales (@unusual_whales) October 30, 2022
Layoffs are anticipated to begin before Nov. 1, when Twitter employees were scheduled to receive stock grants, after Musk’s new team at Twitter worked closely with remaining executives over the weekend to plan an initial 25 percent cut to the company’s staff, the Washington Post reported.
On Twitter, Musk denied a claim by deputy managing director Eric Umansky of ProPublica that he was “making sure to fire people” before this compensation was paid out. Umansky based his claim on a report by the New York Times, which also contained a statement from investor Ross Gerber, whose firm had invested $1 million into Musk’s $44 billion acquisition of Twitter, alleging that roughly half of Twitter employees would be laid off.
— Eric Umansky (@ericuman) October 29, 2022
This is false
— Elon Musk (@elonmusk) October 30, 2022
Aside from layoffs, Musk is planning to make significant changes to Twitter Blue, a subscription that enables additional features on the app, such as the ability to undo tweets and look at certain news articles ad-free, The Verge reported. The cost of the $4.99 per month program will skyrocket to $19.99 and include verification of the user.
Currently, Twitter users can be verified for free, so long as they meet certain requirements for notoriety and are able to provide documents confirming authentication. The team responsible for the adjustments to verification and Twitter Blue has until Nov. 7 to complete the project, or they will be let go, The Verge reported.
Twitter did not immediately respond to The Daily Caller News Foundation’s request for comment.
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