Following the layoffs of about 50% of the workforce at Twitter, multinational advertisers, who make up 90% of the company’s revenue, have paused the placement of their ads. According to the advertisers, the move was due to the unpredictable changes in Twitter and the fear that it might change content regulations, thus making the social media platform unsafe to advertise on.
With this rising uncertainty among advertisers, Elon Musk held a virtual meeting with over one hundred advertisers to reassure them that the platform is safe to advertise. Musk said he had tried “every possible thing to appease” the activists and reiterated that he had not changed Twitter’s content rules. Despite this, multinational advertisers, who make up 90% of Twitter’s revenue, suspended their spending on the platform.
This has seen companies such as General Mills, United Airlines, Audi, Mazda, American Express, Coca-Cola, Johnson & Johnson, Levi Strauss, Spotify, Ford, and Forbes pause their ad spending on the platform.
Others are DIRECTV, Nintendo, Unilever, PBS, O2, Hyundai, Domino’s Pizza, Oreo cookies, Lamborghini, Bentley, Ducati, Michelin, Puma, Reckitt, Sanofi, Hugo BOSS, KIA, Swarovski, Walt Disney, NBCUniversal, Pillow-Fight, and Cole Haan.
With the unpredictable move of Twitter under the new administration, General Motors said it is engaging Twitter to understand its new direction under the new ownership. It says, “As is the normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising. Our customer care interactions on Twitter will continue.”
Likewise, General Mills, a multinational company, said it has suspended its ads on Twitter and will continue to observe the new system and evaluate its marketing expenses. Also, Interpublic Group, a major advertising firm, described the current Twitter situation as “unpredictable and chaotic, and bad actors and unsafe behaviours can thrive in such an environment.”
The 50% layoff at Twitter
The 4th of November 2022 marked a day to be remembered in the history of Twitter as the company laid off about 50% of its workforce. The first sign Twitter employees noticed after the stay-home-on-Friday information was that the company logged them out of their work emails. It was followed by mass layoff messages to some Twitter employees.
The layoffs cut across different departments and countries, including the newly founded African branch. This was evident from the farewell message Bernard Kafiu Sokpe, a Senior Partnership Officer at the Twitter Africa office, made on his Twitter handle.
With the impact of the layoff, Jack Dorsey, Twitter’s co-founder, apologised to the company’s former and current employees in a tweet. He said, “I realise many are angry with me. I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologise for that.”
Although the layoff was not addressed before it was executed, Elon Musk addressed it while speaking at an investment conference in New York. According to him, the firing was necessary for the company to survive. He said, “Twitter had serious revenue and cost challenges before the deal. This has been made worse by activist groups pressuring major advertisers to stop spending money on Twitter.”
He tweeted, “Regarding Twitter’s reduction in force, unfortunately, there is no choice when the company loses over $4M/day. Everyone who exited was offered three months of severance, which is 50% more than legally required.”
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