Amid the economic uncertainty, microblogging site Twitter Inc has warned its employees that they might receive only half of their typical annual bonuses. The social media company, which is fighting a legal to complete a $44 billion sale to Elon Musk, made the announcement in an email to employees and blamed its financial performance for the potential bonus reduction, according to a report by New York Times. As per the US daily, Ned Segal, Twitter’s chief financial officer, said these challenges would probably affect the annual bonuses that they receive, with the bonus pool currently at 50% of what it could be if the company met its financial targets, according to two employees who received the message.
Last month, Twitter’s revenue declined for the first time since 2020 amid fierce competition from Apple and TikTok in a weakening advertising market. The company reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier.
Besides, Elon Musk’s acquisition bid generated the next level of uncertainty about the company’s future. Twitter ties its annual bonuses to its performance against revenue and profitability goals.
Earlier, Musk had agreed to buy Twitter in April but is now trying to pull out of the deal.
Twitter was set to sell the company to Musk for $54.20 per share, making its financial reports little more than a formality as it awaited the deal to close.
But Musk tried to back out of the deal on July 8, claiming Twitter hasn’t been forthcoming with information on the number of fake accounts running rampant on the site.
As a result, Twitter has sued him to force the acquisition. The company is set to face off with Musk in an October trial in Delaware Chancery Court.
Earlier this month, Musk challenged Twitter Inc Chief Executive Officer Parag Agrawal to a public debate about the percentage of bots on the social media platform.
“Let him prove to the public that Twitter has <5% fake or spam daily users!,” Musk said in a tweet.
He also started a poll asking users whether less than 5% of Twitter daily users are fake/spam.
Twitter on Thursday dismissed a claim by Musk that he was hoodwinked into signing a $44 billion agreement to buy the company.
Musk filed a countersuit against Twitter on July 29, escalating his legal fight against the company over his bid to walk away from the purchase agreement.
Like other IT companies, Twitter has also slowed hiring and reduced its real estate footprint. Twitter Inc. initiated a hiring freeze and began rescinding job offers in May. More recently, it said it would be paring back office space, but without job cuts. The company had 7,500 employees in 2021.
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