15th November 2022

Twitter owner Elon Musk has warned staff that the company faces collapse if new ways to generate revenue are not found. His comments follow a turbulent time for the social media platform with 50% of its workforce facing redundancy.

Musk is facing his Gerald Ratner moment, where a throwaway and perhaps careless comment from the charismatic leader becomes a self-fulfilling prophecy, warns insolvency specialist Edward Ellis at accountants Mercer & Hole.

“Twitter is facing an existential crisis. High-profile users are leaving or threatening to leave the platform and big brands have temporarily stopped their advertising following a brutal redundancy round and changes to the platform. Staff that were dismissed last week are reportedly being rehired as the platform looks to rebuild trust.

“Musk’s warning that the platform faces collapse is unlikely to restore advertiser confidence or motivate staff, particularly if laid off a week earlier. It is not the first time an ill-timed comment has seen a business quickly unravel, as jewelry retail Gerald Ratner will testify.

“An outspoken and high-profile business leader can be a real boon in a buoyant and forgiving market. But as the economy slows with a global recession a very real prospect, that can quickly turn into a liability.”

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