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What Elon Musk Is Doing to Twitter Is What He Did at Tesla and SpaceX


Elon Musk was sleeping on the office. He dismissed employees and executives at will. And he lamented his company was on the verge of bankruptcy.

That was back in 2018 and the corporate was Tesla, as Mr. Musk’s electric automaker struggled to construct its mass-market vehicle, the Model 3.

“It was excruciating,” he told The Latest York Times on the time. “There have been times once I didn’t leave the factory for 3 or 4 days — days once I didn’t go outside.”

The billionaire’s experience with what he called Tesla’s “production hell” has grow to be a blueprint for the crisis he has created at Twitter, which he bought for $44 billion last month. Over time, Mr. Musk has developed a playbook for managing his firms — including Tesla and the rocket manufacturer SpaceX — through periods of pain, employing shock treatment and alarmism and pushing his staff and himself to place aside their families and friends to spend all their energy on his mission.

At Twitter, Mr. Musk has used lots of those self same tactics to upend the social media company in only a couple of weeks.

Since late last month, the 51-year-old has laid off 50 percent of Twitter’s 7,500 employees and accepted the resignations of 1,200 or more. On Monday, he began one other round of layoffs, two people said. He tweeted that he was sleeping at Twitter’s offices in San Francisco. And he has applied mission-driven language, telling Twitter’s staff that the corporate could go bankrupt if he wasn’t in a position to turn it around. Those that need to work on “Twitter 2.0” must commit to his “hard core” vision in writing, he has said.

David Deak, who worked at Tesla from 2014 to 2016 as a senior engineering manager overseeing a supply chain for battery materials, said Mr. Musk “clearly thrives in existential circumstances.” He added, “He quasi creates them to light the hearth under everybody.”

The similarities between Mr. Musk’s approach to Twitter and what he did at Tesla and SpaceX are evident, added Tammy Madsen, a management professor at Santa Clara University. But it surely’s unclear if he’ll find the means to motivate employees at a social media company as he did with staff whose quests were to maneuver people away from gas-powered cars or send humans into space.

“At Tesla and SpaceX, the approach has at all times been high risk, high reward,” Dr. Madsen said. “Twitter has been high risk, however the query is: What’s the reward that comes out of it?”

Mr. Musk didn’t reply to a request for comment.

On Sunday, Mr. Musk held a gathering with Twitter’s sales employees, in response to two individuals with knowledge of the matter. Then on Monday, he laid off employees within the sales department, they said. Late last week, Mr. Musk fired Robin Wheeler, a top sales executive, they added. Bloomberg earlier reported that more layoffs may be coming.

Changes at Elon Musk’s Twitter

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A swift overhaul. Elon Musk has hurried to revamp Twitter since he accomplished his $44 billion buyout of the social media company in October, warning of a bleak financial picture and a necessity for brand new products. Here’s a have a look at a number of the changes to this point:

Going private. As a part of Mr. Musk’s acquisition of Twitter, he’s delisting the corporate’s stock and taking it out of the hands of public shareholders. Making Twitter a personal company gives Mr. Musk some benefits, including not having to make quarterly financial disclosures. Private firms are also subject to less regulatory scrutiny.

Layoffs. Just over every week after closing the deal, Mr. Musk eliminated nearly half of Twitter’s work force, or about 3,700 jobs. The layoffs hit many divisions across the corporate, including the engineering and machine learning units, the teams that manage content moderation, and the sales and promoting departments.

Content moderation. Shortly after closing the deal to purchase Twitter, Mr. Musk said that the corporate would form a content moderation council to determine what sorts of posts to maintain up and what to take down. But advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform.

Other possible changes. As Mr. Musk and his advisers look for methods to generate more revenue at the corporate, they are said to have discussed adding paid direct messages, which might let users send private messages to high-profile users. The corporate has also filed registration paperwork to pave the way in which for it to process payments.

Twitter can also be reaching out to some engineers who quit to ask them to return, the people said. In a gathering with employees on Monday, Mr. Musk said the corporate was not planning any further layoffs, in response to one one who attended.

At firms led by Mr. Musk, the pattern of claiming that the firms are on the point of a possible bankruptcy has come up often. At Tesla in December 2008, in the course of the depths of the financial crisis, Mr. Musk closed a $50 million investment round from Daimler, he said, on the “last hour of last day possible or payroll would’ve bounced 2 days later.”

He has said the identical about SpaceX, once noting that each SpaceX and Tesla had a greater than 90 percent likelihood that they “can be value $0” of their early days.

For 2017, Mr. Musk said, SpaceX needed to perform rocket launches once every two weeks or face bankruptcy, recalled one former SpaceX executive, who spoke on the condition of anonymity for fear of retribution. At an organization that was driven by a goal to make life “multiplanetary,” the specter of bankruptcy was a motivating factor, the previous executive said.

What we consider before using anonymous sources. Do the sources know the knowledge? What’s their motivation for telling us? Have they proved reliable up to now? Can we corroborate the knowledge? Even with these questions satisfied, The Times uses anonymous sources as a final resort. The reporter and no less than one editor know the identity of the source.

SpaceX has since successfully sent many rockets into space and safely landed them again on Earth. But Mr. Musk has returned to his favorite stick, tweeting last 12 months that if a “severe global recession” were to dry up capital, bankruptcy on the rocket maker was “not unattainable.”

“Only the paranoid survive,” he wrote, quoting Andy Grove, the previous chief executive of Intel.

A crisis atmosphere and self-imposed austerity gives Mr. Musk the quilt to make drastic changes and fire top managers or eliminate large swaths of staff, two former Tesla executives said. It also prepares those that remain to work under extreme conditions to bring about Mr. Musk’s desires, they said.

The approach at Twitter, where Mr. Musk has laid off 1000’s of employees, “is typical Elon,” Mr. Deak said.

The chaos on the social media company is familiar to individuals who worked at Tesla when the corporate was struggling to ramp up manufacturing of the Model 3, which went on sale in 2017. In May of that 12 months, Mr. Musk sent an email to the staff that echoed a number of the language he has used with Twitter employees.

“Tesla needs to be hardcore and demanding,” he wrote. “The passing grade at Tesla is excellence, since it needs to be.”

Within the 12 months that followed, Mr. Musk famously slept on the ground in a Tesla factory’s conference rooms, fired the vp of engineering and worked 120-hour weeks to deal with a lag within the production of Model 3s. Members of Tesla’s board fearful about Mr. Musk’s workload and his use of Ambien to attempt to sleep.

Foreshadowing the turmoil at Twitter, Mr. Musk spent a part of 2018 on the social media service, antagonizing lawmakers and regulators, including the Securities and Exchange Commission. The S.E.C. later sued Mr. Musk for tweeting that he had the “funding secured” to take Tesla private, though the billionaire never followed through and settled with the agency. This summer, he spent months and hundreds of thousands of dollars in legal fees to back out of his deal to purchase Twitter.

Testifying in Delaware last week in a lawsuit about his Tesla pay package, Mr. Musk acknowledged that his penchant for acting unilaterally can get him in trouble. “After I make decisions without consulting people,” he said, “the probability that those decisions shall be flawed is higher.”

In Delaware, Mr. Musk also downplayed comparisons between what he was doing at Twitter with the Model 3 ramp-up, saying on his way into the courtroom that what was happening on the social media service was “easier.”

A few of Mr. Musk’s former employees query whether his management tactics will ultimately work at Twitter. Tesla and SpaceX were in earlier stages of growth when their boss whipped out his tough language and told everyone they’d to go full tilt. But Twitter is a more mature company that has performed inconsistently for years.

Mr. Musk’s management techniques are “good start-up and growth strategy, nevertheless it shouldn’t be good for constructing a stable company,” Mr. Deak said.

Mr. Musk’s all-in commitment to an organization is commonly inspirational, but can even turn toxic and engender a culture of fear and scapegoating, three former Tesla and SpaceX managers said.

And for Mr. Musk, remaking Twitter is just a part-time job. He stays chief executive of Tesla, which he said in court he continued to guide, and SpaceX, where, he said, he focuses on designing rockets fairly than management.

Mr. Musk also leads the Boring Company, a tunneling start-up, and Neuralink, a brain-computer interface technology firm. He has said his long-term goal is to save lots of humanity by developing technology for space travel, or, in his words, by “making life multiplanetary as a way to make sure the long-term survival of consciousness.”

The multitasking has grow to be a difficulty in a lawsuit filed by Tesla shareholders who objected to the pay package that made Mr. Musk the world’s richest person. Last week in Delaware, under questioning by a lawyer representing shareholders who’ve accused Mr. Musk of neglecting his duties at Tesla, the billionaire said his intense involvement in Twitter was temporary.

“There was an initial burst of activity to reorganize the corporate,” he said last Wednesday, adding, “I expect to cut back my time at Twitter.”

Mike Isaac contributed reporting.

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