Brands pause ad spend as key layoffs hit Musk’s Twitter
Job cuts add to uncertainty for marketers, with media buyers advising clients not to commit to future spending on the platform.
The layoffs exacerbate the uncertainty that has caused brands to pause spending / Adobe Stock
Only a few short days after Elon Musk was compelled to complete his purchase of Twitter, the social media platform has begun laying off vast numbers of its staff. For advertisers that were already concerned about Musk’s changes, it creates more uncertainty at a time when they wanted to see stability.
Musk has apparently acknowledged the impact of brands pausing spending, though he argues it is due to activists rather than uncertainty.
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists. Extremely messed up! They’re trying to destroy free speech in America.
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.
Extremely messed up! They’re trying to destroy free speech in America.— Elon Musk (@elonmusk) November 4, 2022
On Thursday, Twitter staff were informed they would need to check in the morning to see whether they had retained their jobs. It was part of a vast swathe of cuts to Twitter’s cost base imposed by new owner Elon Musk in an attempt to service the vast debt incurred by the purchase.
For marketers it adds to a period of uncertainty, causing some big brands to pause spend on Twitter while media buyers advise clients not to commit to future spending. Companies including General Motors, Volkswagen, Audi and Pfizer have reportedly paused ads on the platform, pending reviews of what the platform ultimately looks like. Mondelez International has also reportedly paused ad spend.
Even before the job losses, major brands were reappraising their plans. A spokesperson for General Motors, for example, stated: “We are engaging with Twitter to understand the direction of the platform under [its] new ownership. As is the normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising. Our customer care interactions on Twitter will continue.”
The news of job losses was met with disbelief, about both the manner in which they were announced and the scale of the cuts, which reportedly run to 3,700 jobs. The loss spans many aspects of Twitter’s operations, from curation to product development teams.
Just to be clear, he fired the team working on this. https://t.co/56I1uyBIIR
Just to be clear, he fired the team working on this. https://t.co/56I1uyBIIR— sillyrobin is a fmr Tweep (@SillyRobin) November 4, 2022
Marketers are concerned about the impact the loss of key staff will have on the platform’s ability to remain a safe place to spend. Jordan Bitterman, chief marketing officer at TripleLift, says: “I believe that Twitter has succeeded largely because of its people: people who built a strong and diverse culture and engaged in earnest dialogue with their customers. I have a deep respect for the team behind the platform and for what they achieved. Growing revenue from essentially zero to over $5bn in 2021 is an impressive feat no matter the industry.”
Yep, the team is gone. The team that was researching and pushing for algorithmic transparency and algorithmic choice. The team that was studying algorithmic amplification. The team that was inventing and building ethical AI tooling and methodologies. All that is gone.
Yep, the team is gone. The team that was researching and pushing for algorithmic transparency and algorithmic choice. The team that was studying algorithmic amplification. The team that was inventing and building ethical AI tooling and methodologies. All that is gone.— Joan Deitchman (@JoanDeitchman) November 4, 2022
Musk’s memo to staff notes that all offices are temporarily being closed and that employees are prohibited from discussing the cuts.
It read, in part: “We acknowledge this is an incredibly challenging experience to go through, whether or not you are impacted. Thank you for continuing to adhere to Twitter policies that prohibit you from discussing confidential company information on social media, with the press or elsewhere.”
Twitter was then immediately sued by former workers who argue that the notice period is too short and breaches federal law in California.
aaand the first class action lawsuit has already been filed:https://t.co/ECAlJIzh65 https://t.co/sPHvoUUSKq— Jesse Lehrich (@JesseLehrich) November 4, 2022
For marketers, the lack of certainty is likely to cause further consternation. Many of the reported changes Musk intends to make at Twitter appear to run counter to brand safety priorities, but until we know what Twitter will ultimately look like the uncertainty will continue.