Elon Musk said Twitter is improving its financials and may break even on a cash-flow basis in the second quarter or even go positive. According to him, significant cost cutting efforts are helping the company to recover.
While speaking at a Morgan Stanley conference in San Francisco, the billionaire owner of the social media platform said the company has been working on making its advertising more relevant after seeing a 50 percent decline in ad revenue.
Musk, who acquired Twitter last year for $44 billion, said he had taken drastic measures to improve the company's financial health mainly through cutting around $3 billion of operational expenses.
He also presented his vision to boost Twitter's core advertising business.
Musk said, "Going forward, Twitter will have very relevant, useful advertising. And because it is useful, because it is relevant, there will be a massive increase in revenue.... It's been a very difficult four months, but I'm optimistic about the future."
Musk also said the company has reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023.
In the interview, he said the company would have gone bankrupt in four months if not for his cost cutting efforts. In the absence of action, Twitter would have had $6 billion in cost and $3 billion in revenue, he noted.
Since closing the acquisition in late October, Twitter's new owner has reshuffled its management, operations and actions. He fired or laid off more than 3,750 employees, eliminated cloud computing costs, and closed one of Twitter's three main data centers.
The company's ad sales were hurt mainly after many advertisers pulled or paused their advertising campaigns from the service after Musk's acquisition, fearing for hate speech and misinformation, and as they waited for more directions under his leadership.
Recently, Twitter relaxed its ads policy to allow political as well as cause-based advertising in the United States, as part of Musk's efforts to prune costs and boost revenue. This was a reversal of Twitter's long-term policy not to allow paid political advertising, which was introduced by then-CEO Jack Dorsey.
Twitter, which had around 7,500 employees at the beginning of 2022, now has some 2,000 employees, according to reports.
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