BusinessDay
NigeriaDecides2023

Twitter lays off 30% of recruitment team, blackout vested stock

Twitter has laid off not less than 30 percent of its talent acquisition team less than two months after it put brakes on hiring.

The microblogging platform which is on the verge of an Elon Musk takeover has reportedly confirmed the layoffs adding that it plans to pay severance packages to employees. The remaining recruitment staff will be reprioritised due to slow activity in hiring new workers.

Ingrid Johnson, a Twitter employee who was affected said the company is not allowing the sale of vested stock by the employees. In employee compensation, vesting stock refers to shares held by an employee that was granted either through employee stock options (ESOs) or restricted stock units (RSUs), that are not yet earned by the employee.

“The idea that your employer can claw back already vested stock if you get laid off is mind-blogging,” Dare Obasanjo, group program manager, Applications and Developer Platform at Microsoft tweeted on Friday. “I originally thought it was a hoax but this was posted by a recruiter who works at Twitter.”

However, some experts have pointed out that there is a difference between a clawback and a blackout which is the decision that Twitter purportedly took. Johnson said the action commenced on 31 May and the brokerage that holds the stock has no end date.

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“So, in addition to losing their jobs, which Twitter assured employees would not happen, many of these folks won’t be able to sell the shares they earned,” Johnson said. “If Twitter has chosen to spend potential billions suing Elon and maintaining a falsely inflated stock price at the expense of the people who gave their lives building the company – that is an even more tragic story.”

Twitter’s revenue has been impacted by the global economic meltdown. The company’s report in the first quarter missed analyst estimates, reporting $1.2 billion versus the $1.23 billion expected. But it beat estimates for earnings per share, at 4 cents, adjusted compared to 3 cents expected.

The acquisition deal with Elon Musk hasn’t been completed because of shareholders’ approval and Musk’s insistence on getting a clearer view of the fake accounts reported by Twitter. Twitter had a conference call with media outlets this week where it explained that its spam account data and technology for blocking bots are just fine, setting a showdown between the company and its would-be new owner. The New York Times has also said Twitter is ready to face Elon Musk in court should the deal not be completed.

Beyond the acquisition brawl, Twitter’s revenue crunch is also being faced by other big tech companies across the world. In the past few days companies such eToro, Shopify, and Remote have laid-off workers. Over 1,815 workers have been laid off so far in July across 21 layoff events around the world.

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