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Details of Elon Musk’s plan revealed in pitch deck; Twitter to fire 1,000 staffers, raise paid users

May 7, 2022 | | Print Article

Elon Musk has revealed his plans for Twitter, and they involve firing 1,000 staffers and increasing the platform’s revenue five-fold by 2028.

In a pitch deck presented to investors and obtained by The New York Times, Musk detailed his vision for Twitter, one that will likely start with the dismissal of hundreds of employees before he brings on a fresh crew of new engineers. Currently, Twitter employs approximately 7,500 employees, and Musk expects this number to rise to 9,225 in 2022, then fall by around 1,000 to 8,332, before surging with new engineers to 11,072 by 2025.

The importance to Musk of qualified engineers and programmers comes as a surprise to no one: He stated as much on Twitter on Friday.

“I strongly believe that all managers in a technical area must be technically excellent,” Musk said. “Managers in software must write great software or it’s like being a cavalry captain who can’t ride a horse!”

“Stock-based compensation costs are also expected to rise to just over $3 billion by 2028, from $914 million in 2022,” The Times reports.

It’s part of Musk’s plan to increase Twitter’s revenue from $5 billion last year to a staggering $26.4 billion in just six years, by 2028.

And Musk won’t be relying on advertising to make that happen.

Musk’s proposal envisions advertising on the platform falling to 45% of total revenue, down from the 90% it generated in 2020. By 2028, advertising would account for $12 billion in revenue, with subscriptions generating close to $10 billion. More revenue would stream in from data licensing and other businesses, according to Musk’s pitch.

While Twitter currently has a payments business that includes tipping and shopping, The Times describes it as “negligible,” and notes that Musk previously helped popularize PayPal and may do the same for Twitter with new payment abilities. In 2023, Musk says Twitter will bring in $15 million from a payments business and that number will skyrocket to $1.3 billion by 2028.

In case you didn’t know, Twitter users have a literal price on their heads, and it’s considered “a key metric for social media platforms,” according to The Times. As of last year, every Twitter user was worth $24.83.  By 2028, under Musk, Twitter’s average revenue per user will rise $5.39 to $30.22.

And those users, says Musk, will increase dramatically.

Though many of us may believe the entire world is frantically tweeting their thoughts, it may surprise you to learn that, at the end of last year, there were only 217 million users on the platform. Musk sees that number growing to nearly 600 million by 2025 and reaching nearly one billion — 931 million — users by 2028. Twitter Blue, Twitter’s ad-supporting business, will account for much of that growth. Users pay $3 per month to customize their Twitter experience, and Musk expects it will bring in 69 million users by 2025 and 159 million by 2028.

And then there’s the mysterious X product, to which Musk anticipates nine million subscribers in 2023, growing to 104 million users by 2028.

The pitch deck doesn’t disclose what X will be, but, again, a look at Musk’s Twitter posts may provide a clue.

“Ultimately, the downfall of the Freemasons was giving away their stonecutting services for nothing,” Musk tweeted on Tuesday.

“Twitter will always be free for casual users,” he added, “but maybe a slight cost for commercial/government users.”

 

And in now-deleted tweets, Musk has previously suggested that lowering the subscription fee to $2 per month, removing ads from their feeds, and awarding every subscriber with a coveted blue checkmark could be the way to go.

“The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive,” Musk said.

Finally, Musk sees Twitter’s free cash flow — which The Times defines as “a measure of how much money a company has to service its debt” — increasing to $3.2 billion in 2025 and $9.4 billion in 2028, allowing him to pay down the $13 billion in debt Twitter will take on as part of his $44 billion buyout. According to Musk’s pitch plan, free cash would flow upwards, even as costs and operating expenses increase.

On Twitter, the reaction to Musk’s pitch deck is largely positive.

“Love his plan,” wrote one user. “Likely will see the shift like this on most platforms. Only way to make them profitable without ads is to add premium content. Musk will box it up with great design and people will love it.”

Melissa Fine
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