As Twitter continues to wait to sell itself to Elon Musk, who seems like he’s been trying to find a way out of the $44 billion deal for months now, it has joined the slew of tech companies laying off employees amid a tumbling stock market and signs of a recession.
The social media company has laid off 30% of its talent acquisition team, the Wall Street Journal reported Thursday, a move said to affect less than 100 employees. The Journal reported that the talent acquisition team, mostly comprised of recruiters, would be the only team affected.
Twitter confirmed the layoffs to Gizmodo on Friday but did not specify the number of employees who would be affected. A company spokesperson said Twitter’s changing business needs motivated the layoffs.
Considering that Twitter froze most hiring and backfills back in May, the layoffs to the talent acquisition team aren’t exactly a surprise. The company reiterated its hiring freeze in an email to Gizmodo and said it was only filling business critical roles.
The company’s stock has been on a roller coaster ride since March, when Musk became enamored with the idea of owning and remaking it. Thus began a game of cat and blue bird, which appeared to end when the cat (Musk) reached a $44 billion deal to eat the bird on April 25. Yet, as with many things that attract Musk’s attention, this infatuation didn’t last. Twitter’s stock as of today is worth $37.19, well below the $54.20 per share that Musk agreed to pay.
If he does pay, that is. A report in the Washington Post on Thursday stated that Musk’s deal to acquire Twitter was in “serious jeopardy.” Citing three anonymous sources familiar with the transaction, the outlet reported that the billionaire’s team has stopped engaging in funding discussions for the $44 billion deal in recent weeks, raising continued doubts about the number of spam and fake accounts on Twitter even after the company provided him with the data he requested.
In mid-May, Musk randomly decided to zero in the number of spam and fake accounts on Twitter and make a huge fuss. He said he didn’t believe these accounts represented less than 5% of users, as the company claimed, and demanded Twitter prove this was true. Twitter eventually acquiesced and gave Musk access to a “firehose” of data, which includes information on the roughly 500 million tweets posted per day and their accompanying metadata.
In the report, a source familiar with the deal told the Post: “Twitter has not been cooperative.
When asked for a comment on the Post report, Twitter said it had no further comment than what it shared in June.
“Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement,” the company reiterated. “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
To be clear, Musk signed the acquisition agreement and is on the hook to complete the deal. Twitter can sue to force him to go through with it, and The New York Times reported Friday that the company was making preparations for a legal battle. If the case goes to the courts, Musk would then have to convince a judge to let him walk away. On the other hand, the billionaire could be forced to pay the $1 billion breakup fee, a scenario that experts say is unlikely, as breakups can only happen under specific circumstances.
“A breakup fee is not an option to walk away,” University of Virginia law professor Mitu Gulati told Axios in May.