Why was Elon Musk’s first decision at Twitter to fire the CEO and the top executives?

2023 © Wikiask
Main topic: Tech
Other topics: Elon Musk, Twitter
Short answer:
  • He allegedly wanted to avoid paying them higher severances, bonuses, and stocks.
  • Musk has publicly aired his disagreements with Twitter's top executives in the past.
  • To develop new features like paid verification and "super-chat", and he wants to bring in new talent on board who are aligned with his new vision.

Elon Musk took over Twitter on 28 October 2022 and decided to take the company private. He has dissolved the board of directors and declared himself as the company's only director. His first order of business was to let go of the top executives at Twitter.

With the six-month-long battle between Twitter and Musk regarding the takeover, it was hard for him to get along with the management. Also, they have different ideologies and a sense of business direction, making the decision a no-brainer for Musk.[1]

Elon Musk allegedly wants to avoid paying severances and other bonuses to top executives at Twitter[edit]

It was estimated that the executives would get around $122 million as a golden parachute upon their untimely departure. This figure excludes the vested shares held by top executives. Musk has sacked senior executives to avoid making large payments for severance and other incentives, and he is also planning to lay off further workers.

Legal experts believe that Twitter executives will receive the payouts unless Musk can prove that they violated the governing company policy or established laws.

Musk has given the order to slash jobs throughout the whole firm, with specific teams being reduced more than others. He also said that layoffs would occur before 1 November 2022, when workers would have received stock awards as remuneration.[2]

There is a history of disagreements between Musk and Twitter's top ex-executives[edit]

Several key executives at Twitter, including the ex-CEO, Parag Agarwal, and Vijaya Gadde, who was in charge of legal, policy, and trust, and Ned Segal, the Chief Financial Officer, have been let off. According to various sources, Musk took responsibility for cleaning the house within the executive ranks.

The CEO of Tesla had previously voiced his disapproval of Gadde on his Twitter account. This was because she had a role in the decision to bar former President Donald Trump from using Twitter.

He has also been involved in a conflict with Agrawal. Musk made his criticism of the new CEO public by tweeting feces emojis at him. The CEO took over for company founder Jack Dorsey late last year.

According to conversation records made public as part of the discovery process in the ongoing legal dispute between the billionaire and the social network, the two sent one other text message that seemed to hint at a falling out.[3]

Musk has accused ex-CEO Parag Agarwal of misleading him and Twitter investors[edit]

Musk has in the past leveled allegations of deception against Twitter's CEO, claiming that Musk and other Twitter investors were misled about the number of false accounts on the social media network. When Musk chose to back out of the transaction, various reasons made headlines. Some of these reasons included worries about the number of bots on Twitter, while others centered on the fact that the firm did not provide 'critical' information.

Parag Agrawal in 2005
Parag Agrawal in 2005 CC BY: Wikimedia

As a direct consequence of the conflict, Mr. Musk informed Twitter on 8 July that he would be ending their business partnership because Twitter had deceived him over the bots and had failed to work with him. After those four days, Twitter filed a lawsuit against Mr. Musk in Delaware, the state where the firm is incorporated, to compel him to finish the acquisition.[4]

Musk is changing the top management to facilitate the changes in the company as per his vision[edit]

Mr. Musk has hinted that he views Twitter as the basis for creating a "super app" that handles everything from money transfers to shopping and taxi-hailing services. He may be thinking of creating something like the immensely popular app WeChat used in China. That's a "super app" form that combines various services, such as texting, social networking, payments, and food orders, into one convenient package. "Twitter's long-term potential is one thousand times bigger than its present worth."

However, Twitter is having trouble engaging its most engaged users, who are very important to the company's success. These "heavy tweeters" make up fewer than ten percent of all monthly users yet are responsible for ninety percent of all tweets and fifty percent of all worldwide income.

Mr. Musk announced that he would likely revoke the ban on Donald Trump, who was expelled from the platform after the assault on the United States Capitol.[5]

References[edit]

  1. "Elon Musk's first day at Twitter: Parag Agrawal, Vijaya Gadde, other top executives fired". www.dailyo.in. Retrieved 2022-11-03.
  2. Reuters (2022-10-29). "'Golden parachutes' for 3 fired Twitter executives worth $122 million". The Hindu. ISSN 0971-751X. Retrieved 2022-11-03.
  3. Corse, Lauren Thomas and Alexa (2022-10-28). "Elon Musk Closes Twitter Deal, Immediately Fires Top Executives". Wall Street Journal. ISSN 0099-9660. Retrieved 2022-11-03.
  4. "5 Points On Parag Agrawal And Why He Was Sacked As Twitter CEO". NDTV.com. Retrieved 2022-11-03.
  5. Bloomberg, Sebastian Tong | (2022-10-05). "Twitter deal paves way for 'X, the Everything App', says Elon Musk". www.business-standard.com. Retrieved 2022-11-03.