It’s been a wild ride for Twitter under Elon Musk. What’s next?

It’s been a wild ride these past two weeks with Twitter under the ownership of Elon Musk, including Musk showing up at Twitter headquarters with a sink and laying off half of the company’s global staff. Just about every day there’s a new headline about what’s happening in the company and on the platform: leadership changes, verification subscriptions rolled out and pulled back, threats to fire employees if they work remotely.

Alex Heath, a deputy editor at The Verge, told Marketplace’s Kimberly Adams that Musk wants to change just about everything at Twitter, even if it’s messy. The following is an edited transcript of their conversation.

Alex Heath: Every day is a new drama. I would say the main thing that’s happened, Elon Musk has actually ordered his second code freeze at Twitter, which essentially means that the engineers there aren’t able to make any changes. And that’s because he’s reviewing all the infrastructure, all the code. The gossip I’m hearing is that engineers are being prepared to do a major rewrite of just how the whole system works. He’s doing kind of a soup to nuts transformation of the company as we speak.

Kimberly Adams: Just this past weekend, thousands of Twitter contractors were laid off without notice, amongst many layoffs that are happening over there. Many of those positions impact content moderation and site maintenance. How has that affected the content on the platform, as best you can tell so far?

Heath: You’re right, he laid off a significant majority portion of Twitter’s contingent workforce over the weekend. And there are obviously concerns that that will lead to the company not being able to catch what it normally would. And Musk’s argument, of course, is that Twitter has been massively bloated and doesn’t need all of this, and has been kind of coasting on too much for too long. So that’s his position.

Adams: What do all of these cuts mean for privacy concerns?

Heath: The privacy concern is real. I mean, so Yoel Roth, who is Twitter’s head of trust and safety, he actually resigned last week. And Yoel Roth was kind of seen as the one holding Twitter together. Now, everyone is trying to figure out who’s actually running this, who’s calling the shots? Is everything going through Elon? How’s that even possible for a company that has 250 million-plus users? So I would say it’s too early to say what the actual ramifications will be. But Twitter is a radically different company than it was a few weeks ago, and we’re just beginning to see the impacts of that.

Adams: Last week, The Verge obtained a recording of Musk’s very first meeting with all of the Twitter employees. What was your takeaway when you heard that audio?

Heath: You know, I’ve covered Musk before and observed how he interacts with employees at his other companies, so I was expecting some erraticness. But I guess I was still surprised by just how all over the place it was. I mean, this is the first time he had addressed a large portion of employees since he took over, almost two weeks after. And this is a meeting that was scheduled like less than an hour before and put on people’s calendars. And it was a Q&A, and it really just oscillated between his product whims of “We should be trying to compete with YouTube and paying creators like YouTube does,” to a very, I would say, tense exchange with an employee about remote work, saying basically, “No, if you don’t show up physically in the office, like starting now, resignation accepted.”

So I would say, oscillating between kind of like pie in the sky, here’s what Twitter the product should be under Musk, which he talked about being a bank, and, like, literally mailing people checks and having Twitter checking accounts and credit accounts and doing even loaning down the road. He was an early founder of PayPal, so I guess there’s a connection there. But I would say oscillating between stuff like that, and the really forced cultural reset that he’s doing, which is “Do we really need to go into the office?” And he’s like, “Yes, or you’re fired.”

Adams: What are we hearing, if anything, from regulators about this, both in the U.S. and globally?

Heath: I reported on this pretty alarming Slack message that was sent by a senior Twitter lawyer on the privacy team, basically encouraging employees to seek whistleblower protection if they felt uncomfortable by what Musk was asking them to do. Twitter is under a [Federal Trade Commission] consent decree where basically they have to say to the agency that “we are using our user data in a responsible way that adheres to this decree, this order that we signed,” or else the executives who certify this can literally go to jail. And actually, the three top executives in compliance who have to certify this to the agency all resigned the day before they were due to send that to the agency. Then you have a lawyer inside a company saying, “Musk is putting us in a position of potentially needing to pay billions of dollars in fines, and we’re maybe going to be breaking the law if we keep doing things the way he says we should do them.”

He really doesn’t have regard for government agencies. He’s been public about this. There was the famous taking Tesla private for $420 a share tweet, and a lawsuit and him saying he doesn’t respect the SEC. This is a tech CEO-billionaire who regularly flouts regulation. And Twitter is a heavily regulated company. And so the [Federal Trade Commission] has already said, “We’re looking at this. We’re very concerned. We’re going to be meeting with Twitter.” And Musk’s personal lawyer is the head of legal at Twitter right now, and he sent a follow-up memo to employees saying, “Don’t worry, the company is going to be liable if we break anything. You won’t necessarily be liable and have to go to jail yourself,” which is never, like, a super reassuring message from your new boss’ personal lawyer.

Adams: What about outside of Twitter? How are advertisers reacting to all of this?

Heath: Not great. Most of the large advertisers have paused their spending or told their clients they should pause their spending. Several of the top agencies in the world who manage spend for brands like Apple, Pepsi, McDonald’s have all told their clients “We recommend just, like, not spending on Twitter at all for the foreseeable future until we have a better sense of what Elon wants to do.” He has said that he doesn’t want Twitter to become a “hellscape,” that he wants it to be a very safe place for advertisers. I would say the rollout of the paid verification checkmark last week showed that he’s not there yet. Like we had brands being impersonated, causing dips in their stock. So there’s a huge concern that being a brand on Twitter is just becoming increasingly risky.

And Musk has said that they’ve seen a “massive drop in revenue” since he took over even as users are growing, which is actually a problem for a company like Twitter, because more users means it’s more expensive to operate the service to pay the cloud bills, etc. So that’s happening while revenue is rapidly falling. And Twitter’s very reliant on advertising. It’s more than 90%-ish of its revenue before it went private under Musk, and he wants to bring in subscriptions to diversify that. But so far, the rollout of [Twitter] Blue, I think it’s safe to say, has been a disaster. I mean, he had to shut it down after less than a week and is now revamping it again. So he’s in a very tough spot. I mean, he said in this meeting with employees that it’s not out of the question that Twitter goes bankrupt. And this is a company he just spent $44 billion on. So he’s in a very tough spot.

Adams: So where do you see Twitter and its users going from here?

Heath: Well, Musk is sleeping in the Twitter San Francisco headquarters, which is something he did when Tesla was facing a massive production crunch several years ago. And he actually references it a lot in interviews, saying this was “one of the most stressful moments in my life. I was sleeping on the factory floor to show employees the level of work and commitment that we needed to have to get through this.” And Tesla did survive that. And actually, you could look back and say that was a moment that Musk rallied the troops and Tesla was the better for it. And now he’s trying to do the same thing inside Twitter, literally sleeping on the floor of the office.

And the question I have, and I think the question a lot of other people have, is will the employees at Twitter rally like the employees that Tesla did, because unlike Tesla, this is a company Elon Musk just bought, fired unceremoniously over email half of the employees at Twitter. And now the rest of them are being told, “You have to show up in the office like right now or you’re fired. You’re going to be responding to Musk’s whims as quickly as possible and executing them. This is a company now dictated by one person who you have barely met.” So I think it’s going to be very tough. And if he does pull this off, and we are talking again in a couple years, and Twitter has a billion users, it’s going to be one of the greatest business pivots in history, or it goes bankrupt. I think those are the two options.