A human resource planning and development project

A human resources planning and development project

Elon Musk and Twitter: A Saga of Tweets
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Author: Arti Chandani, Smita Pande, Raksha Dubey, Victor Bhattacharya
Pub. Date: 2024
Product: Sage Business Cases
DOI: https://doi.org/10.4135/9781071927014
Keywords: Twitter, Elon Musk
Disciplines: Business & Management Skills, General Business & Management, Business & Management
Access Date: July 8, 2024
Publisher: SAGE Publications: SAGE Business Cases Originals
Online ISBN: 9781071927014
© 2024 SAGE Publications: SAGE Business Cases Originals All Rights Reserved.
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Sage Business Cases
© 2024 Arti Chandani, Smita Pande, Raksha Dubey, and Victor
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Abstract
Twitter is one of the most popular social media platforms globally. It has been in the news due to its
takeover by Elon Musk, whose purchase of Twitter became official on October 27, 2022, following a
roller-coaster series of events. Musk paid USD 44 billion for Twitter, which was delisted from the New
York Stock Exchange on November 8, 2022. Musk is an entrepreneur known for his unconventional
and revolutionary business acumen. After obtaining Twitter, he announced a large-scale layoff of Twitter personnel, citing cost cutting and achieving business efficiency as the reasons. This led to unrest
among employees, who were given pink slips without a notice period, and also for top executives at
Twitter. All these actions have invited debate and some companies paused their advertisement campaigns on the platform. Will these decisions, such as the major layoff at Twitter, propel the company to
new heights of success or augur a difficult period ahead? Students will be asked to analyze the importance of leadership style during Musk’s takeover of Twitter. Students will also be asked to critique how
successful leaders manage organizational change.
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Elon Musk and Twitter: A Saga of Tweets
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Case
Learning Outcomes
By the end of this case study, students will be able to:
• highlight the challenges involved in a corporate takeover;
• discuss the impact of a corporate takeover on the workforce;
• analyze the traits of leadership important while a chief executive officer aligns business to the expectations of the stakeholders; and
• assess the importance of effective change management on the market value of a company.
Introduction
Elon Musk, a South African–Canadian–American entrepreneur, bought Twitter on October 27, 2022, for USD
44 billion. The Twitter share price was USD 54.20 per share. The company was listed on the New York Stock
Exchange in 2013 and was delisted on November 8, 2022, as a consequence of the Musk acquisition. Musk
planned to make Twitter an open source platform, which promotes free speech. In addition to this objective,
Musk also planned to combat spambot accounts.
Elon Musk
Musk’s life story and ascendency to the owner of Twitter is both remarkable and interesting. Musk was born
and raised in South Africa. His father is South African and his mother is Canadian. He had a keen interest in
technology and business when he was young. At age 12, he created a computer code for a game and sold
it to a computer magazine. In 1988, after obtaining a Canadian passport, he left South Africa and moved to
Canada. He enrolled first at Queen’s University in Kingston, Ontario, and later studied in the United States
at the University of Pennsylvania, Philadelphia, where he earned a Bachelor’s degree in physics and economics in 1997. In 1995, he created Zip2 to meet the demand for geographical context in digital newspapers.
Compaq, a computer manufacturer, acquired Zip2 in 1999 and paid Musk USD 307 million, which he used to
launch X.com and the forerunner to the online payment service PayPal. eBay paid USD 1.5 billion to acquire
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PayPal from Musk in 2002.
The Major Businesses of Elon Musk
Before purchasing Twitter, Musk was involved in several companies where he was a founder, co-founder or
primary/early investor. The following section gives a brief overview of some of his companies.
SpaceX
Musk was interested in exploring space and other planets. He had a long-forming dream of starting space
exploration (usatoday.com, https://www.usatoday.com/story/news/nation/2020/05/26/spacex-how-elon-musktook-idea-cusp-history/5257977002/). However, the cost of rocket launchers left him unsatisfied and he founded Space Exploration Technologies (SpaceX) in 2002 to meet the need for less expensive rockets.
The company’s first two rockets, the Falcon 1 (first launched in 2006) and the larger Falcon 9 (first launched
in 2010), were created to be far less expensive than rival rockets. The 2018 debut of SpaceX’s Falcon Heavy
rocket was meant to deliver 117,000 pounds (53,000 kg) into orbit, roughly twice as much as its main competitor, the Boeing Company’s Delta IV Heavy, and at a fraction of the price. Musk is not only the CEO of
SpaceX, but also the principal architect of the company’s iconic Falcon rockets, Dragon, and Starship.
Neuralink
Neuralink Corporation is a neurotechnology company co-founded by Musk, Max Hodak, Dongjin “DJ” Seo,
and Paul Merolla. The objective of the company is to manufacture and develop implantable brain–computer
interfaces. The company was launched in 2016 and announced publicly in 2017. Headquarters are located in
San Francisco. The employees of the company include several high-profile neuroscientists. It received funding of USD 158 million in 2019, of which USD 100 million was from Musk. It has been severely criticized
recently for unethical animal testing and violation of animal rights; many platforms have also raised concerns
and speculations about its technological promises.
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Tesla
In 2004, Musk became one of the primary investors in Tesla Motors (later renamed Tesla), an electric car
startup company formed by entrepreneurs Martin Eberhard and Marc Tarpenning. In 2006, Tesla released its
first electric vehicle, the Roadster, which was capable of traveling 245 miles (394 km) on a single charge. The
Roadster was meant to be a luxury vehicle and was priced accordingly. However, Musk had plans to launch
affordable electric vehicles for the masses. Tesla now has five other available electric vehicles, catering to a
variety of consumer preferences. Financially, Tesla has been in the red since its inception and has reported a
profit only in 2020.
Twitter
Twitter, an online microblogging site that transmits brief messages of no more than 280 characters (known as
tweets), had a significant impact on politics and society at the beginning of the 21st century. A Twitter user
types a tweet and transmits it to the Twitter server, which then forwards it to a list of other users (known as
followers) who have agreed to receive the sender’s messages. In addition, users may choose to follow certain
topics by clicking on hashtags (e.g., #movies), generating a form of discussion and increasing the number of
followers in a Twitter feed, potentially reaching into the millions. Twitter is a user-friendly site for both a sender
and a receiver. One can sign up with a free Twitter account and username, which can be used to send tweets
daily, hourly, or as often as one desires. The tweet will be viewed by those who follow the person, and possibly by others as well.
Twitter Used as Social Messaging Tool
Users share their opinions and views, messages, pictures, videos, and other types of content with their followers. Twitter has become a very important tool for social media whereby millions of users are not only sharing
content but consuming content frequently. Twitter is also no exception to the negative side of social media
where a lot of trolling, verbal abuse, etc. is common.
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Elon Musk and Twitter: A Saga of Tweets
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Twitter as News
Twitter is a non-professional form of news reporting. However, if the tweet is posted from the official account
of an organization, news channel, political party, etc., then it is considered to be authentic. People use Twitter
for various means of reporting news, such as natural disasters. Politicians also tweet some statements, as
they can convey to the masses with this communication tool.
Twitter Used as Marketing Tool
Businesses use Twitter for marketing purposes, both domestically and globally. Twitter has a wide reach and
provides instant communication for businesses to reach out to their target audience by promoting their products.
Twitter is Popular Among Celebrities
Because of its user-friendliness and lightning-fast ability to communicate updated information, Twitter has become one of the most popular social networking sites among celebrities. Twitter allows celebrities to cultivate
a more intimate relationship with their followers, although many times they are also being trolled.
Musk’s purchase of Twitter caused uncertainty for the platform. The number of global monetizable daily active
users (mDAU) on Twitter amounted to 237.8 million during the second quarter of 2022, an increase from 229
million mDAU in the preceding quarter (see Figure 1). Musk introduced a paid verification system through
Twitter Blue by November 7, 2022.
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Figure 1. Number of Monetizable Daily Active Twitter Users (mDAU) Worldwide, 2017–2022 (in millions)
Source: Statista.com
As of January 2022 data, global Twitter users are distinct in terms of gender, with males accounting for 56.4%
and females 43.6%.
In terms of age group (see Figure 2), the largest share of users consists of 25–34-year-olds, which constitute
38.5% of users. The second-largest share is those in the age group of 35–49 years with 20.7%. Interestingly,
the age groups of 18–24 years and 50 and older show similar Twitter usage patterns, both of which constitute
17.1% of Twitter users, as of April 2021. The lowest age group of Twitter users is in the range of 13–17 years
which represent 6.6% of the total users.
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Figure 2. Distribution of Twitter Users Worldwide as of April 2021, by Age Group
Source: Statista.com
Figure 3 shows the countries where Twitter is being used. The popularity of Twitter in the United States is
highest with 76.9 million users, followed by Japan with 58.95 million, and India with 23.6 million users, respectively.
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Figure 3. Countries with the Most Twitter Users as of January 2022 (in millions)
Source: Statista.com
In terms of Twitter accounts with the most followers (Figure 4), former US President Barack Obama has the
most at 131.67 million, followed by pop stars Justin Bieber with 114.36 million, and Katy Perry with 108.9 million followers, respectively. The Prime Minister of India, Narendra Modi also features in the Top 10 with 78.03
million followers as of April 2022. This also demonstrates the increasing relevance of Twitter in U.S. domestic
and international politics; the presence of an official Twitter account with ministries proves its popularity as a
medium of interaction with citizens and officials alike. Elon Musk himself is at number eight with 82.48 million
followers.
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Figure 4. Twitter Accounts with the Most Followers Worldwide as of April 2022 (in Millions)
Source: Statista.com
In 2021, Twitter had 429.79 million users. It is projected that by 2025, this number will reach 497.48 million
(see Figure 5). The basis of arriving at this figure is an estimation of traffic data, secondary research, company press material, and application downloads. These refer to average monthly and active user data.
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Figure 5. Number of Worldwide Twitter Users from 2017, Forecast to 2025 (in Millions)
Source: Statista.com
Takeover of Twitter by Elon Musk
Musk became the owner and CEO of Twitter on October 27, 2022, in the wake of gaining the web-based organization for USD 44 billion. What follows is a series of events following the acquisition and the progressions
carried out under his leadership. Twitter was delisted from the New York Stock Exchange on November 8,
2022, following the takeover by Musk’s subsidiary X Holdings II, Inc. The stock of Twitter was trading at USD
53.70 on October 28, 2022, which was slightly lower than the agreed price by Musk at USD 54.20.
Musk’s Agenda
Musk started communicating his opinion of “everything is not right” by tweeting in January 2022 when the Se-
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Elon Musk and Twitter: A Saga of Tweets
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curities and Exchange Commission (SEC) mentioned that his own tweets should be monitored. He tweeted
about his intentions as well; however, it was difficult for anyone to imagine that he had acquisition plans in
mind. He started buying shares in Twitter in January 2022 and went on to become the largest shareholder
of Twitter with a 9.2% stake by April 2022. The announcement that the world’s wealthiest individual had temporarily become the platform’s largest shareholder sent the stock price skyrocketing.
Musk started a poll asking for suggestions on how to make Twitter better and he was offered a board position
in response, which would have limited him to holding only 15% of the business. He initially said “Sure.” Later
he had a change of heart and declined. It shows that Elon Musk wanted to make Twitter better—not by controlling 15% but rather 100%.
Musk revised his statement with the SEC that he was not going to be a spectator in the firm’s operations after
declining a position on Twitter’s board. The clause stating that he would limit his ownership to just 14% of the
business was deleted. In hindsight, it served as the initial indication that he would try something more significant than just investing in a stock or joining a board.
He was invited to join the board of directors on April 5, 2022, on the basis of being the largest shareholder;
however, another tweet surfaced five days later announcing that he would not join the board. April was the
month when attempts were made for a hostile takeover of Twitter, which is considered to be a nuclear threat
to corporate law. Twitter initially resisted the hostile takeover by calling it the “poison pill”; however, the Twitter
board agreed to Musk’s USD 44 billion offer on April 25, 2022, sending a series of shockwaves around the
world.
Musk’s Attempt to Cancel the Deal
Musk tried to cancel the deal in July 2022, on various grounds which impacted the share price of Twitter.
The reasons given included Twitter failing to live up to its potential as a platform for free speech, and failing
to provide the data which he sought to evaluate the existence of “fake” or “spam” accounts. Another reason
Musk gave for pulling back from the deal was the payment of USD 7.75 million to whistleblower Peiter Zatko
by Twitter, without seeking consent of Musk.
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Closure of the Deal: Twitter is Elon Musk’s Baby
Elon Musk stated that he bought Twitter to “save humanity.” He could see great danger and social media had
become a chamber that ignited hate and division in society based on varied viewpoints. He wanted to create
a “digital town square” where people should have healthy conversations over a wide range of beliefs without
resorting to any violence. This would be good for the future of civilization. He also stated that he wanted a
“warm and welcoming” platform for the audience, who in turn should be able to choose desired experiences
as per their preferences.
After closing the deal to own Twitter, Musk tweeted that the company would form a “content moderation council with widely diverse viewpoints under his leadership.”
Twitter and Layoff: Musk(eteer) Manpower
There are many examples of companies reducing their workforce to achieve business efficiency and downsizing without attracting as much media attention as in the case of Twitter. Companies such as Snapchat, Netflix,
Amazon, Meta, etc. have reduced their workforce in the recent past, citing various reasons such as cost cutting, reduction in demand, recession, higher interest rates, etc. These companies have actually planned and
resorted to downsizing in a phased manner to reduce their workforce while in the case of Twitter: “There is no
strategy.”
Musk announced termination of 7,500 Twitter staff within seven days of taking over the company, sending
shockwaves across the market. Inside a couple of days, according to media reports, the organization had
requested some of the latest-withdrawn staff members to continue working, creating an overall impression of
messy administration. Musk’s business methodology additionally raises a significant issue about work privileges: is it legitimate to terminate a large number of employees with practically no prior notice? Musk stated
that the Twitter workforce managing content, platform safety, development of product, and marketing was too
large, which was significantly impacting profits. Table 1 shows the important timelines of major activities at
Twitter.
Table 1. Timelines of Major Activities at Twitter
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Date
Activity
25 March 2022
Musk criticizes Twitter, publicly, for not promoting free speech by way of polling on his Twitter account.
4 April 2022
14 April 2022
12 July 2022
13 May 2022
25 April 2022
4 October 2022
20 October
2022
27 October
2022
1 November
2022
4 November
2022
12 November
2022
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A filing with the SEC uncovers that Musk is Twitter’s biggest investor with a 9% stake. Musk is invited to join Twitter’s board
of directors.
Musk makes a proposal to buy Twitter for USD 44 billion by making an offer of USD 54.20 per share and making the organization private.
Twitter files a case against Musk for pulling out from the acquisition deal.
Musk requires the buyout arrangement to be postponed following reports that 5% of Twitter’s every day dynamic clients are
spam accounts.
Twitter reports to SEC that the Board of Twitter has accepted Musk’s buyout offer unanimously.
Musk agrees to go ahead with the acquisition as per the originally agreed terms and conditions provided Twitter drops the
lawsuits against him.
Musk expresses his intention to terminate 75% of Twitter’s staff.
The deal between Musk and Twitter is sealed. Top executives of Twitter are fired.
Musk affirms plans to charge for verified Twitter accounts at USD 8 per month.
Musk announces the layoff of 50% of Twitter employees citing cost cutting and decreasing revenue as the reasons
Twitter terminates 80% of the contractual workers without any prior notice
Elon Musk and Twitter: A Saga of Tweets
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12 November
2022
Musk restores Donald Trump’s Twitter account
Compiled by authors
Firing of Top Heads
Musk’s first act when he took over Twitter was to fire CEO Parag Agarwal. Next in line were CFO Ned Segal,
General Counsel Sean Edgett, and Head of Legal Policy, Trust and Safety Vijaya Gadde. As per their contracts, these top executives were set to receive a severance package arising out of termination which amounted to around USD 50 million for Agarwal, and USD 37 million and USD 17 million for Segal and Gadde, respectively.
Elon Musk fired the executives “with a cause,” meaning he provided adequate justification that may “invalidate
that arrangement”—a golden parachute. In essence, a golden parachute is a contract that grants top executives of a company significant incentives in the event that they lose their employment as a result of a merger,
takeover, or acquisition. However, if Musk had adequate grounds for the same and still the severance packages were released, is that not a win for the top executives? Given that all these layoffs were in the best
interest of the company, within legal limits, and legitimately undertaken, why is there so much hue and cry?
Resignation by Heads
The action sparked a chain reaction which saw top executives of Twitter starting to resign as they were not
comfortable with seeing their employees being dismissed. Some of them resorted to Twitter to announce their
resignation and send a blue tick to the public. Damien Viel, Head of French Operations, resigned after serving
Twitter for seven years. Robin Wheeler, Head of Marketing and Sales, lost her job as she did not agree to reduce employees from the sales team, as ordered by Musk. Dara Nasr, responsible for advertising operations
in the United Kingdom, also resigned.
Firing, Rehiring, and New Hiring
Musk went for firing immediately after taking over in order to streamline operations. Then Twitter had to apPage 15 of 19
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proach a number of the fired individuals asking them to return as they were laid off unintentionally. This sent
signals to the market that all is not right at Twitter. Musk tweeted that Twitter is again making new hiring decisions as Twitter 2.0 aims to be the “everything app,” with new features for payments and encrypted direct
messages. Rehiring and new hiring might have a positive impact on the firm’s image after the initial firing and
mass layoff sent negative signals to the market.
Driving Change Management
It is very important for any business to drive change in an efficient manner. This involves the change agents
and leaders being action-oriented and they should be able to put in more effort to handle any setbacks. Leaders play a strategic role in change management when it is vital to assess the readiness of the organization
and take stakeholders along. Change management in the case of Twitter resulted in the following outcomes.
Non-Conducive Work Environment
Many companies are prioritizing the well-being of employees and are concerned to create a healthy workplace, while Elon Musk is trying to create an environment that is constrained. Since he took over Twitter, he
has banned remote working and demanded that those still employed put in long hours or accept severance.
Musk informed staff that they must be “ferociously hard. This will require working hard for a lengthy period of
time.”
Employee Retention and Loyalty
Twitter may experience recurring issues with employee recruitment and retention as well as legal challenges
from workers, particularly those with impairments. Before Musk’s takeover, Twitter employed more than 7,500
people, according to a regulatory filing. The employees who were continuing with Twitter could not feel “longterm commitment and true participation.” Most of them were staying with Twitter only because they did not
have any other job options.
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Elon Musk and Twitter: A Saga of Tweets
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Impact on Culture
Each organization has a culture that flows from top to bottom and promoters and directors play an instrumental role in shaping this culture. The layoffs will have an impact on the culture of Twitter, which could become
toxic for the company not only today but in the years to come. The situation impresses that Elon Musk is just
concerned about the numbers game instead of creating and nurturing a conducive culture.
Impact on Revenue
Many companies have stopped advertising on Twitter due to the extreme measures of Musk. This could lead
to a revenue loss, as 90% of the revenue of Twitter comes from advertisements. Musk decided to “name and
shame” the companies that had stopped advertising on Twitter, by sending a tweet on November 5, 2022.
Twitter had 3,980 advertisers in May 2022 which dropped to 2,315 in October 2022—a sharp decline of 41%.
General Motors was the first company to announce that it has paused its adverting on Twitter, fearing sharing
of data with other companies. Automobile advertisers are raising questions about whether to share their data
with Tesla.
Some of the news regarding Elon Musk and his acquisition of Twitter can be viewed at
https://www.youtube.com/watch?v=mEQc-iAbEBk.
Conclusion
Elon Musk is a strong believer in innovation. His company SpaceX has a preference for people who have
an appetite for exploration. Musk also looks for passion, drive, and talent, which are difficult to locate in a
résumé. This also applies to Tesla and Twitter. Innovation and technology are the key pillars on which these
companies are built. Additionally, the HR policies in SpaceX are very conducive for the employees. Elon Musk
has been rated 80/100 by the employees of SpaceX and the HR team has a direct impact on the company’s
culture. Moonlighting has been allowed by Musk in the HR policy of Tesla, whereas other companies consider
moonlighting unethical.
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Elon Musk and Twitter: A Saga of Tweets
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Musk’s tenacious behavior is visible in his management style, where he has the courage to go beyond tradition and shine. Nevertheless, he has shocked the global community with his strategy and leadership at Twitter. The social media industry is propitious and has seen a surge in the number of users in all age groups.
However, the platform has lost its sheen among social media users. Why did this happen? Were appropriate
strategies not devised to ensure seamless change management? Did Elon Musk’s visionary leadership fail to
create a successful transition?
Discussion Questions
1. Prepare a SWOT analysis for Twitter. What is your educated opinion on the future of Twitter?
2. What makes a person a successful change leader? Comment on Musk’s leadership style.
3. What key aspects of human resource management do you believe have been severely impacted by
Musk’s acquisition of Twitter?
4. Discuss the importance of organizational change management in the context of a corporate takeover.
5. What steps should Twitter undertake to increase the number of users globally?
Further Reading
Burnes, B., & Hughes, M. (eds). (2023). Organizational change, leadership and ethics. Taylor & Francis.
Moore, D. A. (2021). Perfectly confident leadership. California Management Review, 63(3), 58–69.
Schell, W. J. (2019). Leadership and change management. In Traffic Safety Culture (pp. 191–218). Emerald
Publishing Limited.
Siebert, S., Paton, R. A., & McCalman, J. (2015). Change management: A guide to effective implementation
(4th ed.). SAGE.
https://edition.cnn.com/2022/04/15/tech/elon-musk-twitter-bid-strategy/index.html
https://elonmusklife.com/about/
https://fortune.com/2022/11/06/twitter-trying-to-rehire-workers-elon-musk-fired-days-ago-sources-say/
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In-depth SWOT Analysis of Twitter | IIDE

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Twitter will be delisted from the New York Stock Exchange on November 8

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https://theconversation.com/why-it-may-not-matter-whether-elon-musk-broke-us-labor-laws-with-his-massfirings-at-twitter-194149
https://www.britannica.com/biography/Elon-Musk
https://www.britannica.com/topic/Twitter
https://www.cnbc.com/2018/06/08/top-hr-exec-at-spacex-what-elon-musk-looks-for-in-employees.html
https://www.comparably.com/companies/spacex/human-resources
https://www.edrawmax.com/article/twitter-swot-analysis.html
https://www.lifewire.com/what-exactly-is-twitter-2483331
https://www.nytimes.com/2022/12/02/technology/twitter-advertising-targetsmissed.html#:~:text=Since%20then%2C%20advertisers%20%E2%80%94%20which%20provide,Musk%20might%20change%20the%20service
https://www.theverge.com/23026874/elon-musk-twitter-buyout-news-updates
https://www.youtube.com/watch?v=mEQc-iAbEBk.
https://www.theverge.com/23026874/elon-musk-twitter-buyout-news-updates
https://www.comparably.com/companies/spacex/human-resources
https://www.cnbc.com/2018/06/08/top-hr-exec-at-spacex-what-elon-musk-looks-for-in-employees.html
https://doi.org/10.4135/9781071927014
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Elon Musk and Twitter: A Saga of Tweets
HRM822 Human Resources Planning and Development Group
Project – Total 25% of Final Mark
Review a provided case study as a baseline for a written assignment and video presentation.
Content will draw on learnings covered in Chapters 9 & 10 and beyond to link all aspects of human
resources planning and development to the critical topics in the case. This complete project
consists of three parts and is worth 25% of your final mark.
1. Group Project: Written Assignment (10)
2. Group Project: Video Presentation (15%)
OBJECTIVE:
The purpose of the assignment is to analyze a case study where knowledge of change
management, downsizing, and restructuring will be applied. Human Resources plays a critical role
in organizations going through these transitions. You will develop the strategic approach HR
professionals should take in supporting an organization through the changes of restructuring and
downsizing, including the critical role of communication. In our current economy we are seeing
Canadian organizations impacted by downsizing and restructuring everyday, this project will allow
students to the opportunity explore how integral Human Resources Planning and Development is
to organizations during these times of change.
Instructions:
Read the following case study:
Case Study: Elon Musk and Twitter: A Saga of Tweets
Review the information presented in the case and consider what you have learned in this course
to complete Part 1: Written Assignment and Part 2: Video Presentation. The link is noted above
and accessible through the Seneca Library. You must log in to the library to access the case.
Note: You are not required to answer the questions presented in the case study only those
outlined in the project.
Part 1: Written Assignment
1
Report Guidelines
•
A title page with at least: project title, student number, student name, course code and date.
•
•
No more than 10 pages double-spaced (Arial font, size 12). Focus on quality, not quantity.
All questions and analysis in the report are to be tied back to concepts, theories, and
processes covered in the course and/or the case.
•
The report should be organized, well formatted and free of grammar and spelling errors.
Clearly separate paragraphs/sections for each question.
•
Use at least three (3) different research sources. The case study itself can be a resource as it
does contain a lot of relevant information, but you are asked to use the specific course
content(textbook) from Chapter 9 and 10 that may not be referenced in the case resources.
•
All work must be in your own words and/or cited with any references made with in-text
citations and a reference page provided (APA or MLA citing).
•
Refer to the rubric provided for this assignment.
Questions and Analysis
1. Prepare an executive summary. An executive summary is an overview of your report
summarizing key points. It is not an introduction. It should be clear, concise, and high level.
2. What key aspects of human resource management do you believe have been severely
impacted by Musk’s restructuring of Twitter? Explain and support your response.
3. What alternatives to downsizing should Musk have considered upon acquisition? Explain and
support your recommendations.
4. What would be your recommended short and long-term plans to downsize the workforce at
Twitter? Identify the criteria you would use in deciding how to downsize the workforce.
5. Discuss the importance of organizational change management in the context of downsizing
and restructuring. What is human resources strategic role in it?
Part 2: Video Presentation
Video Presentation Guidelines:
1. Prepare a 10-minute (maximum) video with visuals and audio.
2
2. The video should be organized, well-formatted with audio and visuals clear. Always think of
the person reviewing the video, have a consistent flow.
3. Please use the Video Presentation cover page provided to upload your assignment via
Blackboard. Be sure that the link to the video has been set to share or made public (i.e.
YouTube).
4. All questions and analysis are to be covered in the video and tied back to concepts, theories,
and processes in the case or the course.
5. Use at least three (3) different research sources. These can be the same as the corresponding
written assignment. The case study itself can be a resource as it does contain a lot of relevant
information, but you are asked to use the specific course content from Chapter 9 and 10 that
may not be referenced in the case resources.
6. Recordings should use professional Business English but can use personal reflections with the
use of “I”, or as directed by the content, with proper grammar and spelling.
7. All work must be in your own words and/or cited with any references made with in-text
citations and a reference slide provided (APA or MLA citing).
8. Refer to the rubric provided for this presentation.
Questions, Analysis and Scenario
1. Draft a 500-word memo from the CEO to all employees that will be delivered verbally in the
video presentation to address the following:
o Why is the downsizing happening? o When will the downsizing happen? o How
will all employees be supported before, during and after the downsizing? o Next steps
2. Prepare a communications strategy based on the recommended short and long-term plans
to downsize the workforce at Twitter, provided in the Written Assignment (Question #4).
o Communication strategy for employees who are exiting.
o Communication strategy for employees who are remaining. How can the
organization support the “survivors” after the downsizing exercise? o Communication
strategy for stakeholders (clients, shareholders and public)
3. The scenario for the video presentation is based on the communications strategy for the
recommended short and long-term plans to downsize the workforce at Twitter provided in
Written Assignment (Groups) – Question #4.
4. All members of the group will be designated into an executive role for this video presentation,
related to the communication strategy and scenario they are presenting. For example,
meeting facilitator/monitor, Chief Executive Officer (CEO), Chief People Officer (CPO), Chief
Operating Officer (COO), VP/Head of Public Relations/Marketing etc. Some groups may need
to improvise with their numbers/roles.
5. The scenario should include an introduction to a virtual or in-person announcement from the
executive team members where they will deliver each element of the communication strategy
to their audiences, where applicable. For example, the CEO might make a general first
3
announcement based on their memo, HR delivers a message to the exiting employees,
Marketing executive to the external stakeholders, COO to the ‘survivors’ etc.
6. The group can organize this video presentation in any manner they choose to be able to
demonstrate a deep understanding of the critical role communication plays in downsizing and
restructuring. Get creative!
Resources:
All resources must be cited correctly. Use your own words.
4
Elon Musk and Twitter: A Saga of Tweets
For the most optimal reading experience we recommend using our website.
A free-to-view version of this content is available by clicking on this link, which
includes an easy-to-navigate-and-search-entry, and may also include videos,
embedded datasets, downloadable datasets, interactive questions, audio
content, and downloadable tables and resources.
Author: Arti Chandani, Smita Pande, Raksha Dubey, Victor Bhattacharya
Pub. Date: 2024
Product: Sage Business Cases
DOI: https://doi.org/10.4135/9781071927014
Keywords: Twitter, Elon Musk
Disciplines: Business & Management Skills, General Business & Management, Business & Management
Access Date: July 8, 2024
Publisher: SAGE Publications: SAGE Business Cases Originals
Online ISBN: 9781071927014
© 2024 SAGE Publications: SAGE Business Cases Originals All Rights Reserved.
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This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles.
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Abstract
Twitter is one of the most popular social media platforms globally. It has been in the news due to its
takeover by Elon Musk, whose purchase of Twitter became official on October 27, 2022, following a
roller-coaster series of events. Musk paid USD 44 billion for Twitter, which was delisted from the New
York Stock Exchange on November 8, 2022. Musk is an entrepreneur known for his unconventional
and revolutionary business acumen. After obtaining Twitter, he announced a large-scale layoff of Twitter personnel, citing cost cutting and achieving business efficiency as the reasons. This led to unrest
among employees, who were given pink slips without a notice period, and also for top executives at
Twitter. All these actions have invited debate and some companies paused their advertisement campaigns on the platform. Will these decisions, such as the major layoff at Twitter, propel the company to
new heights of success or augur a difficult period ahead? Students will be asked to analyze the importance of leadership style during Musk’s takeover of Twitter. Students will also be asked to critique how
successful leaders manage organizational change.
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Case
Learning Outcomes
By the end of this case study, students will be able to:
• highlight the challenges involved in a corporate takeover;
• discuss the impact of a corporate takeover on the workforce;
• analyze the traits of leadership important while a chief executive officer aligns business to the expectations of the stakeholders; and
• assess the importance of effective change management on the market value of a company.
Introduction
Elon Musk, a South African–Canadian–American entrepreneur, bought Twitter on October 27, 2022, for USD
44 billion. The Twitter share price was USD 54.20 per share. The company was listed on the New York Stock
Exchange in 2013 and was delisted on November 8, 2022, as a consequence of the Musk acquisition. Musk
planned to make Twitter an open source platform, which promotes free speech. In addition to this objective,
Musk also planned to combat spambot accounts.
Elon Musk
Musk’s life story and ascendency to the owner of Twitter is both remarkable and interesting. Musk was born
and raised in South Africa. His father is South African and his mother is Canadian. He had a keen interest in
technology and business when he was young. At age 12, he created a computer code for a game and sold
it to a computer magazine. In 1988, after obtaining a Canadian passport, he left South Africa and moved to
Canada. He enrolled first at Queen’s University in Kingston, Ontario, and later studied in the United States
at the University of Pennsylvania, Philadelphia, where he earned a Bachelor’s degree in physics and economics in 1997. In 1995, he created Zip2 to meet the demand for geographical context in digital newspapers.
Compaq, a computer manufacturer, acquired Zip2 in 1999 and paid Musk USD 307 million, which he used to
launch X.com and the forerunner to the online payment service PayPal. eBay paid USD 1.5 billion to acquire
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PayPal from Musk in 2002.
The Major Businesses of Elon Musk
Before purchasing Twitter, Musk was involved in several companies where he was a founder, co-founder or
primary/early investor. The following section gives a brief overview of some of his companies.
SpaceX
Musk was interested in exploring space and other planets. He had a long-forming dream of starting space
exploration (usatoday.com, https://www.usatoday.com/story/news/nation/2020/05/26/spacex-how-elon-musktook-idea-cusp-history/5257977002/). However, the cost of rocket launchers left him unsatisfied and he founded Space Exploration Technologies (SpaceX) in 2002 to meet the need for less expensive rockets.
The company’s first two rockets, the Falcon 1 (first launched in 2006) and the larger Falcon 9 (first launched
in 2010), were created to be far less expensive than rival rockets. The 2018 debut of SpaceX’s Falcon Heavy
rocket was meant to deliver 117,000 pounds (53,000 kg) into orbit, roughly twice as much as its main competitor, the Boeing Company’s Delta IV Heavy, and at a fraction of the price. Musk is not only the CEO of
SpaceX, but also the principal architect of the company’s iconic Falcon rockets, Dragon, and Starship.
Neuralink
Neuralink Corporation is a neurotechnology company co-founded by Musk, Max Hodak, Dongjin “DJ” Seo,
and Paul Merolla. The objective of the company is to manufacture and develop implantable brain–computer
interfaces. The company was launched in 2016 and announced publicly in 2017. Headquarters are located in
San Francisco. The employees of the company include several high-profile neuroscientists. It received funding of USD 158 million in 2019, of which USD 100 million was from Musk. It has been severely criticized
recently for unethical animal testing and violation of animal rights; many platforms have also raised concerns
and speculations about its technological promises.
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Tesla
In 2004, Musk became one of the primary investors in Tesla Motors (later renamed Tesla), an electric car
startup company formed by entrepreneurs Martin Eberhard and Marc Tarpenning. In 2006, Tesla released its
first electric vehicle, the Roadster, which was capable of traveling 245 miles (394 km) on a single charge. The
Roadster was meant to be a luxury vehicle and was priced accordingly. However, Musk had plans to launch
affordable electric vehicles for the masses. Tesla now has five other available electric vehicles, catering to a
variety of consumer preferences. Financially, Tesla has been in the red since its inception and has reported a
profit only in 2020.
Twitter
Twitter, an online microblogging site that transmits brief messages of no more than 280 characters (known as
tweets), had a significant impact on politics and society at the beginning of the 21st century. A Twitter user
types a tweet and transmits it to the Twitter server, which then forwards it to a list of other users (known as
followers) who have agreed to receive the sender’s messages. In addition, users may choose to follow certain
topics by clicking on hashtags (e.g., #movies), generating a form of discussion and increasing the number of
followers in a Twitter feed, potentially reaching into the millions. Twitter is a user-friendly site for both a sender
and a receiver. One can sign up with a free Twitter account and username, which can be used to send tweets
daily, hourly, or as often as one desires. The tweet will be viewed by those who follow the person, and possibly by others as well.
Twitter Used as Social Messaging Tool
Users share their opinions and views, messages, pictures, videos, and other types of content with their followers. Twitter has become a very important tool for social media whereby millions of users are not only sharing
content but consuming content frequently. Twitter is also no exception to the negative side of social media
where a lot of trolling, verbal abuse, etc. is common.
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Twitter as News
Twitter is a non-professional form of news reporting. However, if the tweet is posted from the official account
of an organization, news channel, political party, etc., then it is considered to be authentic. People use Twitter
for various means of reporting news, such as natural disasters. Politicians also tweet some statements, as
they can convey to the masses with this communication tool.
Twitter Used as Marketing Tool
Businesses use Twitter for marketing purposes, both domestically and globally. Twitter has a wide reach and
provides instant communication for businesses to reach out to their target audience by promoting their products.
Twitter is Popular Among Celebrities
Because of its user-friendliness and lightning-fast ability to communicate updated information, Twitter has become one of the most popular social networking sites among celebrities. Twitter allows celebrities to cultivate
a more intimate relationship with their followers, although many times they are also being trolled.
Musk’s purchase of Twitter caused uncertainty for the platform. The number of global monetizable daily active
users (mDAU) on Twitter amounted to 237.8 million during the second quarter of 2022, an increase from 229
million mDAU in the preceding quarter (see Figure 1). Musk introduced a paid verification system through
Twitter Blue by November 7, 2022.
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Figure 1. Number of Monetizable Daily Active Twitter Users (mDAU) Worldwide, 2017–2022 (in millions)
Source: Statista.com
As of January 2022 data, global Twitter users are distinct in terms of gender, with males accounting for 56.4%
and females 43.6%.
In terms of age group (see Figure 2), the largest share of users consists of 25–34-year-olds, which constitute
38.5% of users. The second-largest share is those in the age group of 35–49 years with 20.7%. Interestingly,
the age groups of 18–24 years and 50 and older show similar Twitter usage patterns, both of which constitute
17.1% of Twitter users, as of April 2021. The lowest age group of Twitter users is in the range of 13–17 years
which represent 6.6% of the total users.
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Figure 2. Distribution of Twitter Users Worldwide as of April 2021, by Age Group
Source: Statista.com
Figure 3 shows the countries where Twitter is being used. The popularity of Twitter in the United States is
highest with 76.9 million users, followed by Japan with 58.95 million, and India with 23.6 million users, respectively.
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Figure 3. Countries with the Most Twitter Users as of January 2022 (in millions)
Source: Statista.com
In terms of Twitter accounts with the most followers (Figure 4), former US President Barack Obama has the
most at 131.67 million, followed by pop stars Justin Bieber with 114.36 million, and Katy Perry with 108.9 million followers, respectively. The Prime Minister of India, Narendra Modi also features in the Top 10 with 78.03
million followers as of April 2022. This also demonstrates the increasing relevance of Twitter in U.S. domestic
and international politics; the presence of an official Twitter account with ministries proves its popularity as a
medium of interaction with citizens and officials alike. Elon Musk himself is at number eight with 82.48 million
followers.
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Figure 4. Twitter Accounts with the Most Followers Worldwide as of April 2022 (in Millions)
Source: Statista.com
In 2021, Twitter had 429.79 million users. It is projected that by 2025, this number will reach 497.48 million
(see Figure 5). The basis of arriving at this figure is an estimation of traffic data, secondary research, company press material, and application downloads. These refer to average monthly and active user data.
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Figure 5. Number of Worldwide Twitter Users from 2017, Forecast to 2025 (in Millions)
Source: Statista.com
Takeover of Twitter by Elon Musk
Musk became the owner and CEO of Twitter on October 27, 2022, in the wake of gaining the web-based organization for USD 44 billion. What follows is a series of events following the acquisition and the progressions
carried out under his leadership. Twitter was delisted from the New York Stock Exchange on November 8,
2022, following the takeover by Musk’s subsidiary X Holdings II, Inc. The stock of Twitter was trading at USD
53.70 on October 28, 2022, which was slightly lower than the agreed price by Musk at USD 54.20.
Musk’s Agenda
Musk started communicating his opinion of “everything is not right” by tweeting in January 2022 when the Se-
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curities and Exchange Commission (SEC) mentioned that his own tweets should be monitored. He tweeted
about his intentions as well; however, it was difficult for anyone to imagine that he had acquisition plans in
mind. He started buying shares in Twitter in January 2022 and went on to become the largest shareholder
of Twitter with a 9.2% stake by April 2022. The announcement that the world’s wealthiest individual had temporarily become the platform’s largest shareholder sent the stock price skyrocketing.
Musk started a poll asking for suggestions on how to make Twitter better and he was offered a board position
in response, which would have limited him to holding only 15% of the business. He initially said “Sure.” Later
he had a change of heart and declined. It shows that Elon Musk wanted to make Twitter better—not by controlling 15% but rather 100%.
Musk revised his statement with the SEC that he was not going to be a spectator in the firm’s operations after
declining a position on Twitter’s board. The clause stating that he would limit his ownership to just 14% of the
business was deleted. In hindsight, it served as the initial indication that he would try something more significant than just investing in a stock or joining a board.
He was invited to join the board of directors on April 5, 2022, on the basis of being the largest shareholder;
however, another tweet surfaced five days later announcing that he would not join the board. April was the
month when attempts were made for a hostile takeover of Twitter, which is considered to be a nuclear threat
to corporate law. Twitter initially resisted the hostile takeover by calling it the “poison pill”; however, the Twitter
board agreed to Musk’s USD 44 billion offer on April 25, 2022, sending a series of shockwaves around the
world.
Musk’s Attempt to Cancel the Deal
Musk tried to cancel the deal in July 2022, on various grounds which impacted the share price of Twitter.
The reasons given included Twitter failing to live up to its potential as a platform for free speech, and failing
to provide the data which he sought to evaluate the existence of “fake” or “spam” accounts. Another reason
Musk gave for pulling back from the deal was the payment of USD 7.75 million to whistleblower Peiter Zatko
by Twitter, without seeking consent of Musk.
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Closure of the Deal: Twitter is Elon Musk’s Baby
Elon Musk stated that he bought Twitter to “save humanity.” He could see great danger and social media had
become a chamber that ignited hate and division in society based on varied viewpoints. He wanted to create
a “digital town square” where people should have healthy conversations over a wide range of beliefs without
resorting to any violence. This would be good for the future of civilization. He also stated that he wanted a
“warm and welcoming” platform for the audience, who in turn should be able to choose desired experiences
as per their preferences.
After closing the deal to own Twitter, Musk tweeted that the company would form a “content moderation council with widely diverse viewpoints under his leadership.”
Twitter and Layoff: Musk(eteer) Manpower
There are many examples of companies reducing their workforce to achieve business efficiency and downsizing without attracting as much media attention as in the case of Twitter. Companies such as Snapchat, Netflix,
Amazon, Meta, etc. have reduced their workforce in the recent past, citing various reasons such as cost cutting, reduction in demand, recession, higher interest rates, etc. These companies have actually planned and
resorted to downsizing in a phased manner to reduce their workforce while in the case of Twitter: “There is no
strategy.”
Musk announced termination of 7,500 Twitter staff within seven days of taking over the company, sending
shockwaves across the market. Inside a couple of days, according to media reports, the organization had
requested some of the latest-withdrawn staff members to continue working, creating an overall impression of
messy administration. Musk’s business methodology additionally raises a significant issue about work privileges: is it legitimate to terminate a large number of employees with practically no prior notice? Musk stated
that the Twitter workforce managing content, platform safety, development of product, and marketing was too
large, which was significantly impacting profits. Table 1 shows the important timelines of major activities at
Twitter.
Table 1. Timelines of Major Activities at Twitter
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Date
Activity
25 March 2022
Musk criticizes Twitter, publicly, for not promoting free speech by way of polling on his Twitter account.
4 April 2022
14 April 2022
12 July 2022
13 May 2022
25 April 2022
4 October 2022
20 October
2022
27 October
2022
1 November
2022
4 November
2022
12 November
2022
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A filing with the SEC uncovers that Musk is Twitter’s biggest investor with a 9% stake. Musk is invited to join Twitter’s board
of directors.
Musk makes a proposal to buy Twitter for USD 44 billion by making an offer of USD 54.20 per share and making the organization private.
Twitter files a case against Musk for pulling out from the acquisition deal.
Musk requires the buyout arrangement to be postponed following reports that 5% of Twitter’s every day dynamic clients are
spam accounts.
Twitter reports to SEC that the Board of Twitter has accepted Musk’s buyout offer unanimously.
Musk agrees to go ahead with the acquisition as per the originally agreed terms and conditions provided Twitter drops the
lawsuits against him.
Musk expresses his intention to terminate 75% of Twitter’s staff.
The deal between Musk and Twitter is sealed. Top executives of Twitter are fired.
Musk affirms plans to charge for verified Twitter accounts at USD 8 per month.
Musk announces the layoff of 50% of Twitter employees citing cost cutting and decreasing revenue as the reasons
Twitter terminates 80% of the contractual workers without any prior notice
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12 November
2022
Musk restores Donald Trump’s Twitter account
Compiled by authors
Firing of Top Heads
Musk’s first act when he took over Twitter was to fire CEO Parag Agarwal. Next in line were CFO Ned Segal,
General Counsel Sean Edgett, and Head of Legal Policy, Trust and Safety Vijaya Gadde. As per their contracts, these top executives were set to receive a severance package arising out of termination which amounted to around USD 50 million for Agarwal, and USD 37 million and USD 17 million for Segal and Gadde, respectively.
Elon Musk fired the executives “with a cause,” meaning he provided adequate justification that may “invalidate
that arrangement”—a golden parachute. In essence, a golden parachute is a contract that grants top executives of a company significant incentives in the event that they lose their employment as a result of a merger,
takeover, or acquisition. However, if Musk had adequate grounds for the same and still the severance packages were released, is that not a win for the top executives? Given that all these layoffs were in the best
interest of the company, within legal limits, and legitimately undertaken, why is there so much hue and cry?
Resignation by Heads
The action sparked a chain reaction which saw top executives of Twitter starting to resign as they were not
comfortable with seeing their employees being dismissed. Some of them resorted to Twitter to announce their
resignation and send a blue tick to the public. Damien Viel, Head of French Operations, resigned after serving
Twitter for seven years. Robin Wheeler, Head of Marketing and Sales, lost her job as she did not agree to reduce employees from the sales team, as ordered by Musk. Dara Nasr, responsible for advertising operations
in the United Kingdom, also resigned.
Firing, Rehiring, and New Hiring
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proach a number of the fired individuals asking them to return as they were laid off unintentionally. This sent
signals to the market that all is not right at Twitter. Musk tweeted that Twitter is again making new hiring decisions as Twitter 2.0 aims to be the “everything app,” with new features for payments and encrypted direct
messages. Rehiring and new hiring might have a positive impact on the firm’s image after the initial firing and
mass layoff sent negative signals to the market.
Driving Change Management
It is very important for any business to drive change in an efficient manner. This involves the change agents
and leaders being action-oriented and they should be able to put in more effort to handle any setbacks. Leaders play a strategic role in change management when it is vital to assess the readiness of the organization
and take stakeholders along. Change management in the case of Twitter resulted in the following outcomes.
Non-Conducive Work Environment
Many companies are prioritizing the well-being of employees and are concerned to create a healthy workplace, while Elon Musk is trying to create an environment that is constrained. Since he took over Twitter, he
has banned remote working and demanded that those still employed put in long hours or accept severance.
Musk informed staff that they must be “ferociously hard. This will require working hard for a lengthy period of
time.”
Employee Retention and Loyalty
Twitter may experience recurring issues with employee recruitment and retention as well as legal challenges
from workers, particularly those with impairments. Before Musk’s takeover, Twitter employed more than 7,500
people, according to a regulatory filing. The employees who were continuing with Twitter could not feel “longterm commitment and true participation.” Most of them were staying with Twitter only because they did not
have any other job options.
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Impact on Culture
Each organization has a culture that flows from top to bottom and promoters and directors play an instrumental role in shaping this culture. The layoffs will have an impact on the culture of Twitter, which could become
toxic for the company not only today but in the years to come. The situation impresses that Elon Musk is just
concerned about the numbers game instead of creating and nurturing a conducive culture.
Impact on Revenue
Many companies have stopped advertising on Twitter due to the extreme measures of Musk. This could lead
to a revenue loss, as 90% of the revenue of Twitter comes from advertisements. Musk decided to “name and
shame” the companies that had stopped advertising on Twitter, by sending a tweet on November 5, 2022.
Twitter had 3,980 advertisers in May 2022 which dropped to 2,315 in October 2022—a sharp decline of 41%.
General Motors was the first company to announce that it has paused its adverting on Twitter, fearing sharing
of data with other companies. Automobile advertisers are raising questions about whether to share their data
with Tesla.
Some of the news regarding Elon Musk and his acquisition of Twitter can be viewed at
https://www.youtube.com/watch?v=mEQc-iAbEBk.
Conclusion
Elon Musk is a strong believer in innovation. His company SpaceX has a preference for people who have
an appetite for exploration. Musk also looks for passion, drive, and talent, which are difficult to locate in a
résumé. This also applies to Tesla and Twitter. Innovation and technology are the key pillars on which these
companies are built. Additionally, the HR policies in SpaceX are very conducive for the employees. Elon Musk
has been rated 80/100 by the employees of SpaceX and the HR team has a direct impact on the company’s
culture. Moonlighting has been allowed by Musk in the HR policy of Tesla, whereas other companies consider
moonlighting unethical.
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Musk’s tenacious behavior is visible in his management style, where he has the courage to go beyond tradition and shine. Nevertheless, he has shocked the global community with his strategy and leadership at Twitter. The social media industry is propitious and has seen a surge in the number of users in all age groups.
However, the platform has lost its sheen among social media users. Why did this happen? Were appropriate
strategies not devised to ensure seamless change management? Did Elon Musk’s visionary leadership fail to
create a successful transition?
Discussion Questions
1. Prepare a SWOT analysis for Twitter. What is your educated opinion on the future of Twitter?
2. What makes a person a successful change leader? Comment on Musk’s leadership style.
3. What key aspects of human resource management do you believe have been severely impacted by
Musk’s acquisition of Twitter?
4. Discuss the importance of organizational change management in the context of a corporate takeover.
5. What steps should Twitter undertake to increase the number of users globally?
Further Reading
Burnes, B., & Hughes, M. (eds). (2023). Organizational change, leadership and ethics. Taylor & Francis.
Moore, D. A. (2021). Perfectly confident leadership. California Management Review, 63(3), 58–69.
Schell, W. J. (2019). Leadership and change management. In Traffic Safety Culture (pp. 191–218). Emerald
Publishing Limited.
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Elon Musk and Twitter: A Saga of Tweets
Sage
Sage Business Cases
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