# Musk warns of Twitter bankruptcy as more senior executives quit
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-11
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Twitter's New Owner Elon Musk Suggests Potential
Meta Description: Find out how new owner Elon Musk's warnings about bankruptcy and key resignations are shaking up Twitter's future.
URL: https://financedigest.com/musk-warns-of-twitter-bankruptcy-as-more-senior-executives-quithtml

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By Katie Paul and Paresh Dave

(Reuters) -Twitter Inc’s new owner Elon Musk on Thursday raised the possibility of the social media platform going bankrupt, capping a chaotic day that included a warning from a U.S. privacy [regulator and the exit of the company’s trust and safety](https://www.financedigest.com/non-profit-safety-regulator-uses-machine-learning-to-improve-public-safety.html "Non-profit Safety Regulator uses Machine Learning to Improve Public Safety") leader.

The billionaire on his first mass call with employees said that he could not rule out bankruptcy, Bloomberg News reported, two weeks after [buying it for $44 billion – a deal that credit experts say](https://www.financedigest.com/sega-sammy-says-it-is-considering-buying-angry-birds-maker-rovio.html "Sega Sammy says it is considering buying Angry Birds maker Rovio") has left Twitter’s finances in a precarious position.

Earlier in the day, in his first company-wide email, Musk warned that Twitter would not be able to “survive the upcoming economic downturn” if it fails to [boost subscription](https://www.financedigest.com/netflix-cuts-prices-in-some-countries-to-boost-subscriptions-shares-drop.html "Netflix cuts prices in some countries to boost subscriptions, shares drop") revenue to offset falling advertising income, three people who have seen the message told Reuters.

Yoel Roth, who has overseen Twitter’s response to combat hate speech, misinformation and spam on the service, resigned on Thursday, two people familiar with the matter told Reuters.

In his Twitter profile on Thursday, Roth described himself as [“Former Head](https://www.financedigest.com/italy-names-former-treasury-official-to-head-ita-airways.html "Italy names former Treasury official to head ITA Airways") of Trust & Safety” at the company.

Roth did not respond to requests for comment. Bloomberg and [tech site Platformer reported](https://www.financedigest.com/digital-transformation-report-reveals-biggest-finance-tech-fears-for-2018-sophisticated-cyber-threats-and-being-ready-for-gdpr.html "Digital transformation report reveals biggest finance tech fears for 2018: sophisticated cyber threats and being ready for GDPR") his exit first.

Earlier on Thursday, Twitter’s [Chief Information Security Officer](https://www.financedigest.com/tips-for-choosing-the-right-chief-finance-officer-for-your-business.html "Tips for Choosing the Right Chief Finance Officer for Your Business") Lea Kissner tweeted that she had quit.

Chief Privacy [Officer](https://www.financedigest.com/host-analytics-appoints-chris-labruna-as-chief-revenue-officer.html "Host Analytics Appoints Chris LaBruna as Chief Revenue Officer") Damien Kieran and Chief Compliance Officer Marianne Fogarty also resigned, according to an internal message posted to Twitter’s Slack messaging system on Thursday by an attorney on its privacy team and seen by Reuters.

Robin Wheeler, the company’s top ad sales executive, told [employees in a memo that she was staying at the company](https://www.financedigest.com/why-more-companies-are-asking-new-employees-to-commence-employment-before-christmas.html "Why more companies are asking new employees to commence employment BEFORE Christmas."), a person who had seen the message said, diverging from earlier media reports that she too would be leaving.

“I’m still here,” Wheeler tweeted late on Thursday.

The U.S. Federal Trade Commission said it was watching Twitter with “deep concern” after the three privacy and [compliance officers](https://www.financedigest.com/millie-richardson-appointed-as-new-chief-compliance-risk-officer.html "Millie Richardson Appointed As New Chief Compliance & Risk Officer") quit. These resignations potentially put Twitter at [risk of violating regulatory](https://www.financedigest.com/is-regtechs-rise-one-way-tackle-the-international-regulatory-game-of-risk.html "Is Regtech’s rise one way tackle the international regulatory game of Risk?") orders.

Musk attorney Alex Spiro told some [employees in an email late on Thursday that Twitter](https://www.financedigest.com/after-elon-musks-ultimatum-twitter-employees-start-exiting.html "After Elon Musk’s ultimatum, Twitter employees start exiting") would remain in compliance.

“We spoke to the FTC today about our continuing obligations and have a constructive ongoing dialogue,” Spiro wrote.

He stated that only Twitter, not individual employees, could be held liable against the orders.

I understand that there have been [employees at Twitter who do not even work](https://www.financedigest.com/how-to-protect-your-employees-mental-health-while-remote-working.html "How to protect your employees’ mental health while remote working") on the FTC matter commenting that they could (go) to jail if we were not in compliance – that is simply not how this works,” he wrote.

In his first meeting with many employees at Twitter on Thursday afternoon, Musk [warned that the company may lose billions of dollars](https://www.financedigest.com/powells-warning-on-higher-u-s-rates-pushes-dollar-to-3-mth-high.html "Powell’s warning on higher U.S. rates pushes dollar to 3-mth high") next year, the Information reported.

Musk added in the email to [workers that remote work](https://www.financedigest.com/1-in-5-uk-workers-believe-there-is-a-gender-divide-with-work-uniforms.html " 1 in 5 UK workers believe there is a gender divide with work uniforms") would no longer be allowed and that they would be expected in the office for at least 40 hours per week.

Twitter, Musk and Spiro did not respond to requests for comment on a potential bankruptcy, the FTC warning, or the departures.

Musk ruthlessly [moved to clean house](https://www.financedigest.com/how-to-move-house-when-youre-on-a-tight-budget-5-key-tips.html "How to move house when you’re on a tight budget? 5 Key tips") after taking over on Oct. 27 and has said the [company was losing more than $4 million](https://www.financedigest.com/swiss-insurance-company-helvetia-uses-squirro-to-deliver-better-search-results-to-its-five-million-customers.html "Swiss insurance company Helvetia uses Squirro to deliver better search results to its five million customers") a day, largely because advertisers started fleeing once he took over.

Twitter has $13 billion in [debt after the deal](https://www.financedigest.com/analysis-no-china-no-deal-bid-to-break-sovereign-debt-logjams-gets-weary-thumbs-up.html "Analysis-No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up") and faces interest payments totaling close to $1.2 billion in the next 12 months. The payments exceed Twitter’s most recently disclosed cash flow, which amounted to $1.1 [billion as of the end](https://www.financedigest.com/td-other-banks-reach-1-35-billion-settlements-to-end-stanford-litigation.html "TD, other banks reach .35 billion settlements to end Stanford litigation") of June.

[Musk has begun charging $8 a month for the Twitter](https://www.financedigest.com/elon-musk-plans-to-cut-half-of-twitter-jobs-bloomberg-news.html "Elon Musk plans to cut half of Twitter jobs – Bloomberg News") Blue service that will include a blue check verification.

WARNING

We are tracking [recent developments](https://www.financedigest.com/automotive-hmi-system-market-recent-industry-developments-and-growth-strategies-adopted-by-players.html "Automotive HMI System Market: Recent Industry Developments and Growth Strategies Adopted by Players") at Twitter with deep concern,” Douglas Farrar, the FTC’s director of public affairs, told Reuters.

No [CEO or company](https://www.financedigest.com/in-listening-mode-new-bayer-ceo-keeps-open-mind-on-company-split.html "In listening mode, new Bayer CEO keeps ‘open mind’ on company split") is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to [ensure compliance](https://www.financedigest.com/the-lego-blocks-of-saas-how-microservices-can-help-ensure-compliance-with-changing-financial-regulations.html "The Lego blocks of SaaS: how microservices can help ensure compliance with changing financial regulations"), and we are prepared to use them,” Farrar said.

In May, Twitter [agreed to pay $150 million](https://www.financedigest.com/iag-agrees-to-buy-80-stake-in-air-europa-for-400-million-euros.html "IAG agrees to buy 80% stake in Air Europa for 400 million euros") to settle allegations by the FTC it misused private information, like phone numbers, to target advertising to users after telling them the information was collected only for security reasons.

[Twitter’s privacy attorney on Thursday mentioned in the internal memo that Spiro had said that Musk](https://www.financedigest.com/musk-secures-46-5-billion-in-funding-for-twitter-bid.html "Musk secures .5 billion in funding for Twitter bid") was willing to take a “huge amount of risk” with the company. “Elon puts rockets into space, he’s not afraid of the FTC,” the attorney quoted Spiro as saying.

Twitter’s buyout has sparked concerns that Musk, who has often waded into political debates, could face [pressure from countries trying to control](https://www.financedigest.com/analysis-u-s-regulators-could-be-pressured-by-slim-republican-house-control.html "Analysis-U.S. regulators could be pressured by slim Republican House control") online speech.

It prompted U.S. President Joe Biden to [say on Wednesday that Musk’s](https://www.financedigest.com/musk-says-tesla-price-cuts-triggered-demand-2023-sales-could-hit-2-million-vehicles.html "Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 million vehicles") “cooperation and/or technical relationships with other countries is worthy of being looked at.

ADVERTISERS NOT REASSURED

Musk told advertisers on Wednesday, speaking on Twitter’s Spaces feature, that he aimed to turn the platform into a force for truth and [stop fake accounts](https://www.financedigest.com/onespan-launches-ai-based-risk-analytics-stop-account-takeover-new-account-fraud.html "OneSpan Launches AI-Based Risk Analytics to Stop Account Takeover and New Account Fraud").

His assurances may not be enough.

Chipotle Mexican Grill said on Thursday it had pulled back its paid and owned content on Twitter “while we gain a better [understanding on the direction of the platform under its new leadership.”](https://www.financedigest.com/corporate-leadership-understanding-your-own-bias.html "Corporate Leadership: Understanding Your Own Bias")

It joined other brands including General Motors that have [paused advertising on Twitter since Musk](https://www.financedigest.com/elon-musk-and-others-urge-ai-pause-citing-risks-to-society.html "Elon Musk and others urge AI pause, citing ‘risks to society’") took over, concerned that he will loosen content moderation rules.

(Reporting by Katie Paul in Palo Alto, California and Paresh Dave in Oakland, California; Additional reporting by Jeffrey Dastin in Palo Alto, Diane Bartz in Washington, Yuvraj Malik in Bengaluru and Fanny Potkin and Hyunjoo Jin; Writing by Sayantani Ghosh; Editing by Shounak Dasgupta, Bill Berkrot, Deepa Babington and Sam Holmes)


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