Twitter has reportedly not paid rent at its San Francisco headquarters, or any of its offices, in the six weeks since the start of the Elon Musk regime, and Musk has shaken up his legal team in anticipation of lawsuits from jilted creditors.
Elon Musk’s $44 billion Twitter acquisition wasn't all funded with his own cash, obviously. But with Tesla's stock price down and Musk relying heavily on Saudi and Qatari investors — who have him very much bent over the table, with interest expenses reportedly near $1 billion a year — there are big bills coming due.
We heard last month that Musk had been stiffing vendors to try to cut the company’s costs. And you may have heard that Twitter has been auctioning off their furniture to try to make back a few greasy dollars. But we now learn from the New York Times that Twitter has not been paying rent at its SF Market Street headquarters, nor at any of its offices since Musk took over.
Elon Musk's Twitter is:— Ryan Mac 🙃 (@RMac18) December 13, 2022
-No longer paying rent at any of its offices
-Reconsidering whether to pay employees severance
-Not working with lawyer Alex Spiro
-Getting legal help from SpaceX
Latest w/ @MikeIsaac, @kateconger, @nytmike https://t.co/KVisOKN2Nv
“To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks, three people close to the company said,” according to the Times report. “Twitter has stopped paying rent on offices and is considering not paying severance packages to former employees, among other measures.”
Oh, wow!— Roaring 20s Redux (Misho ILIEV) 🚴🏻♂️🇺🇦 (@MishoMoney) December 13, 2022
Twitter has stopped paying rent on offices and is considering not paying severance packages to former employees, among other measures. pic.twitter.com/awzoXTB5mj
The non-payment of rent may just be a negotiating tactic, and after all, when you lay off more than half the company, you no longer need all that office space. “As Twitter has downsized, Mr. Musk’s team has been hoping to renegotiate the terms of lease agreements,” according to the Times. “The company has received complaints from real estate investment and management firms including Shorenstein, which owns the San Francisco buildings that Twitter occupies.”
“A spokesman for Shorenstein declined to comment,” the Times adds.
Surprise! Several ex-employees say Twitter has gone back on agreements surrounding severance packages. Lawsuits and arbitration claims have been filed.https://t.co/Qf3kfqIMpv— Sarah Reese Jones (@PoliticusSarah) December 7, 2022
It’s not a shock that Musk would try to weasel out of paying severance. He’s already facing a handful of lawsuits over this, so that number will likely grow. And Musk is clearly looking for more reasons to cancel severance agreements. While Musk calls himself a “free speech absolutist,” he wants to fire people for talking to the press. Platformer reports he sent employees an email Friday saying, “If you clearly and deliberately violate the NDA that you signed when joining Twitter, you accept liability to the full extent of the law and Twitter will immediately seek damages.”
But the company has bigger fish to fry, including possible crackdowns by regulators in the U.S. and the EU, and the issue of creditors. Shake-ups in the Twitter legal department seem to indicate some sort of battle-readying. Musk’s personal attorney, Alex Spiro, was made head of Twitter’s legal department after Musk took over, but today the Times reports that “Mr. Spiro is no longer working at Twitter.”
Instead, Musk has brought lawyers over from SpaceX? It would seem the legal issues that they typically deal with are quite different than those facing Twitter, but hey! They're already on the payroll.
Image: SAN FRANCISCO, CA - NOVEMBER 04: Twitter headquarters stands on Market Street on November 4, 2022 in San Francisco, California. Twitter Inc reportedly began laying off employees across its departments on Friday as new owner Elon Musk is reportedly looking to cut around half of the company's workforce. (Photo by David Odisho/Getty Images)