Elon Musk says Twitter has had ‘massive’ revenue drop as advertisers pause spending

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Elon Musk, Founder and Chief Engineer of SpaceX, speaks during the Satellite 2020 Conference in Washington, DC, United States on March 9, 2020.
Yasin Ozturk | Anadolu Agency | Getty Images

Twitter has suffered a “massive drop in revenue” because of advertisers pausing spending on the social media platform, Elon Musk, the new owner of the company, said Friday without providing numbers.

In a tweet, the Tesla, Twitter, and SpaceX CEO cast blame on “activist groups pressuring advertisers.” He said Twitter hasn’t changed its content moderation strategy, and added the company has done “everything we could to appease the activists.”

Musk didn’t specify how much revenue the company has lost from the pullback, or how he was able to attribute that loss to pressure from activist groups.

Musk reiterated his views Friday in an interview at the Baron Investment Conference.

“We’ve made no change in our operations at all,” Musk said at the event. “And we’ve done our absolute best to appease them and nothing is working. So this is a major concern. And I think this is frankly an attack on the First Amendment.”

Twitter has fired or laid off approximately 50% of its employees since he took over on Oct. 28.

In recent days, a number of companies said they would temporarily pause their advertising spending on Twitter to see how things would change there under Musk’s ownership. Tesla competitors General Motors and Audi, and food titan General Mills are among the companies that have paused Twitter spending.

United Airlines suspended its advertising on Twitter earlier this week, a spokesperson for the carrier said on Friday. The airline is still posting on the platform. It appeared to be the first U.S. passenger airline to say it suspended advertising on Twitter. Airlines separately provide customer service on Twitter, which United is also not suspending, the spokesperson said, declining to provide further detail on the decision.

Ad giant IPG advised clients to temporarily pause their Twitter media plans, though it’s unclear how many clients are taking IPG agencies’ advice.

Twitter informed employees Thursday evening that it would begin laying off staff members, according to communications obtained by CNBC. Twitter’s content moderation team is expected to be among those job cuts, Reuters reported, citing tweets by employees.

Musk in a tweet Friday, addressed the layoffs, saying: “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required.”

CNBC has not confirmed this with former Twitter employees.

CNBC has also learned that deep cuts were made to Twitter’s global marketing team which handles, among other things, reporting and metrics around ad performance, sales performance and spam.

Earlier this week Musk, who now calls himself “Chief Twit,” met with a group of leaders of civil society organizations to address concerns about hate speech and election-related misinformation on the platform.

Since Musk took the helm, online trolls and bigots raided Twitter, and hate speech has surged on the platform. Musk also tweeted out, then deleted, an unfounded and anti-LGBTQ conspiracy theory about a home invasion and assault on Paul Pelosi, husband of Speaker of the House Nancy Pelosi.

Some of the organizations represented in the hourlong Zoom call on Tuesday have now co-signed an open letter to top Twitter advertisers urging them to suspend their ad spending if Musk fails to enforce the company’s safety standards and community guidelines.

Despite Musk’s claims of a recent revenue slump, Twitter’s ad spending had been on the decline before his takeover of the company was complete, and before civil society organizations began pressuring brands, according to ad analytics platform MediaRadar.

Advertisers on Twitter increased between April and May, around the time that Musk’s plan to take Twitter private was announced, before it began to decline, according to data from MediaRadar. But the average number of advertisers on the platform fell from 3,900 in May to 2,300 in August. It had 2,900 advertisers in September.

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