Musk's Twitter hasn't paid rent since takeover — and threatens to end severance for laid-off workers

Twitter has even begun to auction off furniture and kitchen equipment from its office

Published December 14, 2022 1:36PM (EST)

In this photo illustration, the image of Elon Musk is displayed on a computer screen and the logo of Twitter on a mobile phone. (Muhammed Selim Korkutata / Anadolu Agency via Getty Images)
In this photo illustration, the image of Elon Musk is displayed on a computer screen and the logo of Twitter on a mobile phone. (Muhammed Selim Korkutata / Anadolu Agency via Getty Images)

Billionaire Elon Musk is making more cost-cutting moves at Twitter and may not pay severance packages to the thousands of workers he fired earlier this year, according to a report from The New York Times.  

Since acquiring the social media company for $44 billion in October, Musk has restructured Twitter's legal department and disbanded a council that advises the site on safety issues in an effort to cut costs. Seven people privy to internal conversations at the company told the Times that Musk is preparing for potential litigation and, in anticipation, has instructed employees to withhold payments to vendors. 

Twitter has not paid rent for its San Francisco headquarters, or any of its offices around the world for weeks, three of the sources told the outlet. Under Musk's leadership, the company has also refused to pay a $197,725 bill for private charter flights made the week of the takeover, according to a copy of a lawsuit filed in New Hampshire District Court that was obtained by the Times.

Executives at Twitter have also proposed the idea of denying severance payments to the workers that were laid off during the takeover, two people said. Musk has also threatened to sue employees if they talk to the media or behave "in a manner contrary to the company's interest," according to an internal email sent last Friday.

Musk's role at Twitter has launched the company into chaos, with thousands of resignations and layoffs, and significant changes to the platform's community guidelines that repelled many advertisers from the site. 

Within hours of closing his deal in October, Musk fired both the chief legal officer and general counsel for Twitter and instated his personal lawyer Alex Spiro, to manage legal matters at the company. Spiro is no longer working for Musk at Twitter, according to six people who knew of the decision. They claimed that Musk was unhappy with some of Spiro's decisions, such as trying to retain Twitter's deputy general counsel, James Baker, during the various rounds of layoffs. 

Musk fired Baker last week after discovering that he was responsible for reviewing the internal communications about Twitter's decision to suppress a 2020 New York Post story about Hunter Biden's laptop. He then demanded that the communications, which he has dubbed the "Twitter Files," be released to a group of journalists to distribute in an attempt to discredit the former executives at the company. 

Now that there are significantly fewer legal experts at Twitter, Musk is using lawyers from his other companies, such as SpaceX, to take their places. More than six lawyers from Musk's rocket company have been granted access to the internal systems at Twitter, two people confirmed to the Times. Some of these SpaceX employees include Chris Cardaci, the company's vice president of legal, and Tim Hughes, its senior vice president, global business and government affairs.

Twitter is also facing legal challenges from the Federal Trade Commission, which is looking into whether the company is still adhering to the consent decree it signed in 2011 after two data breaches. The company promised that it would not mislead users about privacy protection, but in May, it paid $150 million to the FTC and the Department of Justice to settle privacy violation allegations.

Since then, the FTC has sent letters to Twitter inquiring about whether it has enough resources and staff to stick to the terms of the consent decree, two people told the Times. 

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A threatening email was sent out to employees on Friday from Musk: "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." The email was first reported by the Platformer newsletter.

Musk's team has also discussed the benefits and drawbacks of not paying severance packages to the thousands of employees who have either left or been fired by the company. While they tried to escape the payments in October, they ultimately decided that in accordance with federal and state labor laws, employees would be given two months of pay and one month of severance pay. 

However, they are now reconsidering whether it would be easier to just face lawsuits from former employees instead of paying them as promised, two people said. Many employees have yet to receive their severance paperwork and Musk has already refused to pay the millions of dollars to executives that he terminated, claiming they were fired "for cause." 

Twitter has also laid off kitchen staff and has begun to auction off items from the office and industrial-grade kitchen equipment. 

Other staff that have been cut include Twitter's global head of infrastructure, Nelson Abramson, and the global information technology head and vice president of information security, Alan Rosa.

Members of Twitter's trust and safety council, who work on content moderation issues regarding civil rights and child safety, were notified on Monday that their group would be dissolved immediately. 

"Safety online can mean survival offline," Jodie Ginsberg, president of the Committee to Protect Journalists, told the Times. "As a platform that has become a critical tool in both open and repressive countries, Twitter must play a constructive role in ensuring that journalists and the public at large are able to receive and impart information without fear of reprisals."

By Samaa Khullar

Samaa Khullar is a former news fellow at Salon with a background in Middle Eastern history and politics. She is a graduate of New York University's Arthur L. Carter Journalism institute and is pursuing investigative reporting.

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