Inside the Twitter meltdown
Elon is speaking. VPs are resigning. Is bankruptcy next?
Everything went from bad to worse at Twitter on Thursday. Today let’s talk about a truly chaotic 24 hours at the company, and the mounting fears over what it means for the service that still serves as the heartbeat of the global news cycle.
I.
On Wednesday morning, amid mounting concerns from advertisers that the new Twitter would not prove to be a safe home for brands, Elon Musk held an hour-long Spaces call designed to reassure them.
Joining Musk on the call were his head of trust and safety, Yoel Roth, a seven-year veteran of the company who had served as a steady hand during a tumultuous transition; and Robin Wheeler, the company’s de facto head of sales, who had spent a decade selling ads for the company across several key roles.
On the call Musk performed his usual routine, offering a scattershot set of product announcements that were almost certainly news to the people who would soon be called upon to build them. Soon the timeline would comprise mostly tweets from paid subscribers, he said, with the rest relegated to a zone comparable to Gmail’s spam filter. The site would soon enable … longer video downloads?
And, of course, Twitter would remain brand-safe: pressuring users to subscribe, he said, would (somehow) reduce the number of bots and spam on the site, making the service more welcoming to advertisers.
A day later, Roth was gone, the company’s new verification scheme had introduced a variety of serious new brand risks onto the platform, and a company that had already been battered by massive layoffs had lurched into a fresh crisis.
So let’s talk about the events that set this crisis into motion.
II.
The dramatic unwinding of the company’s senior ranks began overnight, in the hours after Twitter’s new owner made his first official communication to the entire company.
The email came at 11:39 PM PT, long after most employees around the world had gone to bed. “Sorry that this is my first email to the whole company,” Musk began, “but there is no way to sugarcoat the message.”
The message: that Twitter’s future is “dire,” Musk wrote, an effect of a worsening economy and the company’s dependence on brand advertising. “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn. We need roughly half of our revenue to be subscription.”
Musk linked to the Spaces he had held with Roth and Wheeler, and ended with a bombshell: every remaining Twitter employee was expected to return to their offices to work beginning Thursday. (“Obviously, if you are physically unable to travel to an office or have a critical personal obligation, then your absence is understandable,” he added.)
Seventeen minutes later, Musk followed up with a one-sentence email to the team labeled “Top Priority.” “Over the next few days,” he wrote, the absolute top priority is finding and suspending any verified bots/trolls/spam.”
Over the next few hours, Twitter employees began to wake up to the news. It had been paired with another change, announced elsewhere, in the company’s 2023 benefits package: the same day Twitter told employees to return to the office after telling them last year they could work remotely forever, Twitter ended its practice of giving a commuter subsidy to employees outside of California.
“What is the guidance for tweeps with children and other dependents who need to arrange childcare etc?” one employee asked in a Slack channel. “These are not arrangements that can realistically be changed at a moment’s notice, for example enrolling in daycare, hiring nannies, arranging managed care facilities, etc. This new policy seems designed to penalize parents, guardians, and other caregivers who may have designed their whole lives around full or partial remote work.”
No guidance was forthcoming, though.
III.
About six hours later, a lawyer on Twitter’s privacy team posted a rebuttal to Musk on the company’s Slack. “Twitter is a remote-first workplace, and has operated as such for years,” wrote the attorney, whose name Platformer is withholding to protect their privacy. “It is a fundamental change to our employment contracts to require a 40hr a week in-office requirement. I do not, personally, believe Twitter employees have an obligation to return to office. Certainly not on no notice at all.”
We checked in with Vincent P. White, a labor lawyer in New York, who said if Twitter employees were promised remote work in their contracts, Musk’s order could constitute a breach of contract, and they’d have grounds to sue. But he doubted whether the contract language was that strong. “Simply calling a position remote isn’t necessarily enough to make it binding,” he said.
In the internal note this morning, the Twitter lawyer offered another jolting bit of news: as Platformer was first to report, its chief privacy officer, Damien Kieran; its chief information security officer; Lea Kissner; and its chief compliance officer, Marianne Fogarty, had all resigned.
As if that weren’t concerning enough, the lawyer reported that Twitter appeared poised to de-prioritize various privacy and safety considerations, likely in violation of a consent decree that the company has with the Federal Trade Commission.
The Verge posted the entire note. The attorney wrote:
Elon has shown that his only priority with Twitter users is how to monetize them. I do not believe he cares about the human rights activists. the dissidents, our users in un-monetizable regions, and all the other users who have made Twitter the global town square you have all spent so long building, and we all love.
I have heard Alex Spiro (current head of Legal) say that Elon is willing to take on a huge amount of risk in relation to this company and its users, because “Elon puts rockets into space, he’s not afraid of the FTC.” I have heard another leader in the Legal department say that because of the tight SLA’s (of two weeks?!) between product inception > launch, Legal will “have to shift the burden to engineers” to self-certify compliance with FTC requirements and other laws. This will put huge amount of personal, professional and legal risk onto engineers: I anticipate that all of you will be pressured by management into pushing out changes that will likely lead to major incidents.
All of this is extremely dangerous for our users. Also, given that the FTC can (and will!) fine Twitter BILLIONS of dollars pursuant to the FTC Consent Order, extremely detrimental to Twitter’s longevity as a platform. Our users deserve so much better than this.
The attorney, who said they would be taking the remainder of the day off, ended with a link to Whistleblower Aid, and encouraged any employee who felt uncomfortable with what the Musk regime had asked them to do to call the FTC directly.
(Around 4PM, Musk emailed the staff to say “Twitter will do whatever it takes to adhere to both the letter and spirit of the FTC decree.”)
IV.
Just after lunchtime on the West Coast, Musk held an unannounced all-hands meeting with staff — his first as CEO. Musk had given employees just one hour’s notice; he arrived 15 minutes late.
Over the next hour Musk shared more bad news with the company. Depending on the length and severity of the recession, he said, the company could lose several billion dollars next year. He would not speculate how much runway Twitter had left. “Bankruptcy isn’t out of the question,” he said, as we were also first to report.
Around that time, someone put a poll into Twitter’s Slack channel: “Is it too early for vodka?” the poll asked. (It was a little after 1PM PT.)
Musk also took a pugnacious tone with employees who questioned the wisdom of a forced return to the office. Speaking of the value of in-person work, he said: “If you can physically make it to an office and you don’t show up, resignation accepted.”
Those last two words would loom larger in the hours afterward, when Roth tendered his resignation. So did John Debay, director of software engineering. That left massive holes in the product and trust and safety, further increasing the difficulty for Musk as he attempts to retain and recruit advertisers.
That difficulty of growing the ad business had already been increased by Musk’s decision, against the advice of many employees on his team, to proceed with an ill-considered plan to make verification checkmarks available to anyone willing to pay $8 for a subscription to Twitter Blue.
The flaws in the plan were numerous, and obvious. Ever since the white-on-blue checkmark was introduced in 2009, it has signified that the account belongs to who it says it belongs to. The process has always been flawed, and was ripe for an overhaul, but at least the badge’s meaning has been clear.
Musk insisted on re-using that same checkmark, but applied no requirements to who could ask for one. As a result, like clockwork, as soon as the new program rolled out yesterday people began to abuse it.
A fake but “verified” account for Eli Lilly tweeted: “We are excited to announce insulin is free now,” forcing the real Eli Lilly to respond that (alas) no it isn’t. A fake but “verified” basketball journalist tweeted falsely that the controversial player Kyrie Irving had been released. A fake but “verified” Canadian Broadcasting Corporation account appeared.
There was also, inevitably, a fake but “verified” Tesla account, and you can probably guess the kind of thing it tweeted.
It wasn’t exactly mayhem — you can imagine worse uses of this technology — but at the very least it hinted of darker abuses to come.
V.
One of Musk’s other ideas, discussed during his Spaces event Wednesday, was to turn Twitter into a payments company.
“Now we can say like, OK, you’ve got a balance on your account, do you want to send money to someone else within Twitter?” Musk said, as transcribed by CNBC. “And maybe we pre-populate their account with and say, OK, we’re gonna give you 10 bucks, and you can send it anywhere within Twitter.”
The company has been working to make that a reality. On Nov. 4 the company named Esther Crawford, who has been leading the rollout of the new Blue, CEO of Twitter Payments, according to a screenshot viewed by Platformer. The company is currently seeking a money transmitter license in Washington, according to the message.
It seems likely that work will be hampered by Thursday’s exodus of employees. It’s difficult to imagine a the company launching a payments business without competent executives working on privacy, information security, compliance, and other functions that the company lost today.
Platformer has also learned that much of the security governance risks and compliance team has left — leaving Twitter with few employees to gather documents and evidence should the FTC come calling.
On one hand, the situation is moving so quickly at Twitter that any predictions seem especially unwise. On the other, a real sense of doom began to pervade the timeline today, as some users began to ponder for the first time a world with a defunct or deserted Twitter.
Musk’s whim-based approach to product development, his rapidly depleting executive ranks, and the very real likelihood of hundreds or even thousands of additional departures at the company in coming weeks threaten to leave Twitter a shadow of its former self. And much of the reason for that is Musk himself: the way he treated his employees and the product they built; the sage advice he ignored; the business fundamentals that he misunderstood.
Musk’s takeover of the company had been so brutish and poorly planned that, we’re told, there was not even a proper handover of the company’s social accounts. As a result, having spent $44 billion to acquire Twitter, for his first week-plus of owning the company, Musk and his team were unable even to tweet from the @twitter account.
The team finally managed to access the account on Wednesday, sources tell us. But @twitter has been silent since October 13.
And with the way things are going, people are beginning to contemplate a world in which Twitter at large goes silent as well.
Correction, 6:50 p.m.: This story originally said that Wheeler resigned as well. She has since tweeted that she remains with the company; we are told that after initially resigning she was persuaded to stay.
On the podcast this week: We attempt to stay on top of the Twitter news, even as fresh events continually overtake us. Kevin explains the FTX implosion to me. And amid mounting layoffs across tech, we ask whether regulators will change their opinion about whether Meta is still public enemy No. 1.
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Governing
European Union antitrust enforcers are sending Meta a list of charges over anti-competitive practices as part of an investigation into the company’s classified ads business. (Samuel Stolton / Politico)
If Republicans take the House, they’re planning to go after Big Tech, subpoenaing companies like Meta and Google for documents and forcing high level decision-makers to testify. (Anna Edgerton / Bloomberg)
Apple made changes to AirDrop in China, making it more difficult for protestors to use the feature to spread anti-government images. (Mark Gurman / Bloomberg)
Western security advisers are warning delegates at the COP27 climate summit in Egypt not to download the Egyptian government's official smartphone app, citing concerns that it could be used to hack their private emails, texts and voice conversations. (Mark Scott and Vincent Manancourt / Politico)
Industry
Binance announced it is pulling of its non-binding agreement to buy rival crypto exchange FTX. The company said the decision was a result of corporate due diligence and news reports about US investigations into FTX. (Angus Berwick and Tom Wilson / Reuters)
Also: Before Binance pulled out, FTX founder Sam Bankman-Fried told investors that without a cash injection the company would need to file for bankruptcy. (Gillian Tan / Bloomberg)
And finally: Here is a layout of FTX’s very complicated corporate structure, which liquidators and law enforcement agencies will have to make sense of as the exchange hurtles toward bankruptcy. Looks like the floor plan of the Titanic? (Bryce Elder / Financial Times)
Twitter’s crowdsourced fact-checking project Birdwatch is going to be even more important after Elon Musk laid off half the staff including people tasked with vetting questionable posts. (Taylor Lorenz, Will Oremus and Jeremy B. Merrill / Washington Post)
The Twitter layoffs cut critical teams in Southeast Asia, Latin America, and Africa, leaving employees worried about the company’s ability to protect users. (Andrew Deck, Nilesh Christopher, Daniela Dib, Antonia Timmerman, Olatunji Olaigbe and Alex González Ormerod / Rest of World)
Gas, an app that lets teens send anonymous compliments to friends, has been hit with a wave of troubling and unfounded rumors that it’s being used for sex trafficking. (Taylor Lorenz / Washington Post)
Apple committed to spending $450 million with US companies, including Globalstar, to enable its new emergency satellite texting feature. (Kif Leswing / CNBC)
OpenSea said it is standing by creators and continuing to enforce royalties on the platform. (Cameron Thompson / CoinDesk)
Those good tweets
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So the guy who refused to pay $6 billion to help stopping hunger in the world will waste more than 7 times the amount to burn down one of the most important networks.
Unbelievable!
Incredible reporting y’all. Thanks for doing what you do.