Musk has fired more than half of Twitter’s staff and lost many advertisers
since taking over in October
Elon Musk’s Twitter is facing a
steep slump in ad revenues in 2023, according to digital research company
Insider Intelligence, which is forecasting just $2.98 billion for the year,
down from its forecast last October of $4.74 billion.
The main reason is that advertisers don’t trust Musk.
“With
three-quarters of its staff gone, a flurry of policies being introduced and
sunsetted, and Musk’s controversial image, Twitter has a long way to go
before it can win back the trust of both advertisers and users,” the company
said in a new report.
Twitter is aiming to make up for the ad
revenue shortfall with subscription revenues, “but it won’t succeed,” said
the report.
Twitter Blue has chalked up just $11 million from
mobile subscriptions in its first three months, according to Sensor Tower
data reported by TechCrunch.
Insider Intelligence reaches estimates by analyzing many
elements related to the ad business, including macro-level economic
conditions, historical trends of the ad market, historical trends of each
medium in relation to other media, data from benchmark sources, consumer
media consumptions trends and interviews with executives at ad agencies,
brands, media publishers and others.
Tesla Inc. TSLA, +1.24%
Chief Executive Musk acquired Twitter last October for $44 billion. Within
weeks, he had laid off more than half of its staff, which now numbers less
than 2,000 compared with 7,500 when he took over.
The cuts
affected product managers, data scientists and engineers who worked on
machine learning and site reliability, roles that help keep the company’s
various features up and running.
The monetization-infrastructure team, which maintains the
services that make money for Twitter, was cut to fewer than eight people
from 30.
Musk has also reportedly stiffed vendors and clashed
with landlords after failing to pay rent on some of the company’s
offices.
