The $44 billion purchase of Twitter by Elon Musk wasn’t entirely financed by his own funds, of course. However, there are significant debts owing as a result of Tesla’s stock price decline and Musk’s reliance on Saudi and Qatari backers, who have him working very hard and spending an estimated $1 billion a year on interest.
In an effort to reduce the company’s expenses, Musk was allegedly stiffing suppliers, as we learned last month. You may also be aware that Twitter has been selling off its furnishings at auction.
But as of late, we’ve learned via the New York Times that since Musk took control, neither Twitter nor any of its offices have been paying rent at their locations on Market Street in San Francisco.
According to three sources close to the firm, Twitter hasn’t paid rent for its San Francisco headquarters or any of its international locations in weeks due to budgetary constraints.
Twitter, among other things, “has ceased paying rent on offices and is thinking about not providing severance payouts to former workers.”
Since laying off more than half the workforce likely means you won’t need as much office space, withholding rent might be a negotiation technique.
According to the Times, Mr. Musk’s staff “had been seeking to renegotiate the terms of leasing agreements” as a result of Twitter’s downsizing.
The real estate investment and management business Shorenstein, which owns the San Francisco buildings that Twitter resides in, has filed grievances with the corporation. The Times continues, “A Shorenstein spokesperson refused to comment.”
It’s hardly surprising that Musk would strive to avoid having to pay severance. He’s already been named in a few cases over this, and more will probably follow.
Musk is also obviously seeking additional justifications to renege on severance arrangements. Musk wants to terminate individuals for speaking to the press, despite the fact that he declares himself an “absolutist” of free speech.
Platformer claims he sent an email to staff members on Friday warning them that Twitter will immediately pursue damages if they “clearly and intentionally breach the NDA that you signed when joining Twitter.”
However, the corporation has more pressing concerns, such as the problem of creditors and potential regulatory actions by the US and EU. Changes in Twitter’s legal team seem to be a sign of some type of readiness for a fight.
After taking over, Musk appointed Alex Spiro, his personal attorney, to lead Twitter’s legal division. However, the Times reported today that “Mr. Spiro is no longer working at Twitter.”
Instead, Musk invited attorneys from SpaceX to his office. It seems that the legal challenges they generally face are quite different from those that Twitter is now experiencing, but hey! They are already being paid.