The Impacts of Management Malpractice on Company Performance As Demonstrated By Elon Musk’s Twitter 2.0
INTRODUCTION
More than 93,000 workers in U.S based tech companies 1 have been laid off in mass job cuts so far in 2023, according to a crunch base News tally, and the year is just starting. On Friday, the 4th of November, Twitter laid off 50% of its global workforce.
AT TWITTER 2.0, ELON MUSK LAYS OFF DEPARTMENTS AND VOICES THAT EXIST TO CHECK HIS POWER
Barely two weeks after Elon Musk’s ascension as the new CEO of Twitter, workers were rudely notified through their emails that they had been laid off as a result of “a global workforce reduction.” 2 This sparked major outrage from employees and the general public, who argued that Musk’s decision was erratic and unwarranted. Although Musk claimed that the layoffs were necessary because Twitter was overstaffed and many of the workers were redundant, the team at today’s Twitter is a skeleton of its former self.
Affected departments include communications, diversity and inclusion, policy, and legal – the very same departments that exist to check and hold accountable executives for management malpractice and harmful decision making, which would include the way Musk has handled layoffs and how he continuous to manage the remaining workforce.
Musk then proceeded to shut down access to Twitter’s internal Slack, preventing employees from communicating about company decisions and his mistreatment of the workforce. How dictatorial of him to try to control communication and squash organizing.
Among those whose voices were silenced for speaking out was Marcin Kadluckza, 3 a Twitter senior engineer, who after tweeting about Musk’s unrealistic deadlines, was laid off.
In an act to increase control over remaining workers, Musk revoked the flexible work-from-home benefit that many employees enjoyed.
Musk’s erratic decisions have also affected workforces outside Twitter, including the vulnerable workers at Flagship, 4 a cleaning agency whose contract was terminated by Twitter without any explanation.
Remaining workers have resorted to sleeping in their offices and working overtime to meet Musk’s expectation of a “hardcore” employee. When you consider that many workers unaffected by the impact of layoffs are immigrants who have no choice but to work, or resign and face the risk of deportation; the picture for the type of environment and workplace conditions that Musk has created at Twitter 2.0 becomes indisputably clear. Not surprising then that still employed workers are warning new hires to stay away.
TWITTER’S VALUATION AND STOCK PRICE REACTIONS TO MUSK’S LAYOFFS
Despite promises of no more layoffs since the massive cut in November, there have been three more layoffs by Musk, the recent one affecting the Twitter Ad department on the 18th of February, 2023. Musk is reported to have set a deadline of one week for the Ad department to make Twitter Ads run like Google Ads.
He has been described by many as an erratic billionaire who is unqualified to run the platform.
VIOLATED LABOUR LAWS
As far as we can tell, through the course of these layoffs, Musk has broken at least three labor laws: the Worker Adjustment and Retraining Notification (Warn) Act, the National Labor Relations Act (NLRA), and the Whistleblower Protection Act.
The drastic cuts by Musk have sparked major outrage worldwide, and legislators are being asked to cut off Musk’s excesses and protect workers’ rights.
A group of laid-off employees in the U.S. filed a class action complaint against Twitter for allegedly violating the Worker Adjustment and Retraining Notification (WARN) Act, 7 which requires employers to give their workers a 60-day notice before mass layoffs.
In addition, he is said to have a history of lawsuits alleging harassment and discrimination and disregarding labor laws in his other companies. He had also been accused of allowing a toxic workplace culture 6 fester at his Tesla Company.
IMPACTS ON COMPANY PERFORMANCE
In the time since the first reported layoffs and Musk’s mismanagement of Twitter 2.0, Twitter’s stock price has fallen.
In addition, Twitter’s primary source of revenue, advertisements, 5 have witnessed a major setback as many top brands are withdrawing or putting their Ad buys on hold as a result of Musk’s mismanagement of Twitter.
The cuts to product development and ad sales have turned the once value creation centers into cost centers.
Then there is the drop in individual and organizational performance resulting in decreased value creation stemming from a drops in moral, engagement and productivity because of the uncertainty created by the layoffs; contrary to Musk’s counter attempts with employees sleeping in the office.
Finally, there are the lawsuits that will cost Twitter more than anyone can predict just yet.
Authored and Researched by Emma Dallmeyer
Commissioned and Edited by Hason Greene
SOURCES
- https://www.theedgemarkets.com/node/656064
- https://www.thedailybeast.com/elon-musk-slammed-by-twitter-employees-during-mass-layoffs-as-tremendously-shty
- https://drunkonsocial.com/twitter/musk-continues-to-the-twitter-cull/
- https://documentedny.com/2023/01/12/twitter-layoffs-cleaning-janitors-h1b-unio/
- https://www.usatoday.com/story/tech/2022/11/28/twitter-loses-advertisers-after-elon-musk/10790189002/