Elon Musk Revamps Twitter With Help From Tesla Staff
From the Wall Street Journal
Elon Musk has leveraged his diverse business empire in his first week owning Twitter Inc., blurring the line between the newly private social-media company and Tesla, the electric-car maker he also runs.
Tesla engineers were among the first outsiders to begin working on reshaping Twitter after Mr. Musk completed his $44 billion takeover a week ago, part of at least dozens of people added to an internal company directory, according to documents viewed by The Wall Street Journal. The list included some people who appear to work for the Boring Co., a tunneling business Mr. Musk founded.
The Tesla employees have reviewed the coding work of Twitter engineers, including how much code they had produced, according to people familiar with the matter. The evaluations of employees’ work came as Mr. Musk’s team was drafting plans for job cuts, the people said.
Representatives for Twitter, Tesla and the Boring Co. didn’t immediately respond to a request for comment.
Mr. Musk, after taking over Twitter, said the company seemed to have more managers than software coders.
Mr. Musk, a serial entrepreneur who also runs rocket company SpaceX, has a history of tapping certain corners of his business empire for the benefit of others. A Boring Co. test tunnel unveiled in 2018, for example, was constructed at SpaceX headquarters, partly by employees of the rocket company using equipment purchased with its funds, the Journal reported at the time.
More than a decade ago, Mr. Musk personally borrowed $20 million from Space Exploration Technologies Corp., as the rocket company is formally known, to support Tesla. Years later, in 2015 and 2016, SpaceX bought roughly $255 million worth of solar bonds from SolarCity, the home-solar company where Mr. Musk was chairman and the largest shareholder. Tesla bought the solar company in 2016.
Mr. Musk and a team of lieutenants have moved quickly to reshape Twitter, ousting many of its top leaders, developing plans for new products, and working to improve what they say are shortcomings in the company’s business model. Employees are expecting layoffs that some estimate could range from around 2,000 to nearly 3,750, the latter equating to about half of the roughly 7,500 employees Twitter had at the start of this year.
The exact scope and duration of the Tesla employees’ work at Twitter, and whether there is any contractual relationship that reimburses the vehicle maker, couldn’t be determined.
Mr. Musk’s reliance on employees from publicly traded Tesla to assist in turning around his social-media company raised questions with some corporate governance experts.
Tesla’s board ought to be monitoring the length and intensity of the Tesla employees’ deployment to Twitter, said Jeffrey Sonnenfeld, a professor at the Yale School of Management. A longer assignment could be of particular concern, he said.
“Is there any expected return for Tesla from any of this? It’s hard to see it,” Dr. Sonnenfeld said.
Tesla regularly discloses various transactions with SpaceX in regulatory filings. Last year, SpaceX paid Tesla $2.8 million for vehicle components and related labor and support, $40,000 for solar modules and $100,000 for refurbished power supplies and related services, a securities filing showed. SpaceX, meanwhile, charged Tesla $500,000 for use of a private plane. And in 2020, SpaceX paid Tesla around $100,000 after the car maker agreed to temporarily assign roughly 20 employees to the rocket company to provide technical support, securities filings showed.
Brian Mulberry, a portfolio manager at Tesla investor Zacks Investment Management Inc., said he wasn’t concerned about Mr. Musk’s use of Tesla engineers at Twitter, at least for now. If the situation continues for several months, that would be another matter, he said.
“If the senior management is spending too much time solving other people’s problems, then they’re not solving their own at Tesla,” Mr. Mulberry said.
Elon Musk has leveraged his diverse business empire in his first week owning Twitter Inc., blurring the line between the newly private social-media company and Tesla, the electric-car maker he also runs.
Tesla engineers were among the first outsiders to begin working on reshaping Twitter after Mr. Musk completed his $44 billion takeover a week ago, part of at least dozens of people added to an internal company directory, according to documents viewed by The Wall Street Journal. The list included some people who appear to work for the Boring Co., a tunneling business Mr. Musk founded.
The Tesla employees have reviewed the coding work of Twitter engineers, including how much code they had produced, according to people familiar with the matter. The evaluations of employees’ work came as Mr. Musk’s team was drafting plans for job cuts, the people said.
Representatives for Twitter, Tesla and the Boring Co. didn’t immediately respond to a request for comment.
Mr. Musk, after taking over Twitter, said the company seemed to have more managers than software coders.
Mr. Musk, a serial entrepreneur who also runs rocket company SpaceX, has a history of tapping certain corners of his business empire for the benefit of others. A Boring Co. test tunnel unveiled in 2018, for example, was constructed at SpaceX headquarters, partly by employees of the rocket company using equipment purchased with its funds, the Journal reported at the time.
More than a decade ago, Mr. Musk personally borrowed $20 million from Space Exploration Technologies Corp., as the rocket company is formally known, to support Tesla. Years later, in 2015 and 2016, SpaceX bought roughly $255 million worth of solar bonds from SolarCity, the home-solar company where Mr. Musk was chairman and the largest shareholder. Tesla bought the solar company in 2016.
Mr. Musk and a team of lieutenants have moved quickly to reshape Twitter, ousting many of its top leaders, developing plans for new products, and working to improve what they say are shortcomings in the company’s business model. Employees are expecting layoffs that some estimate could range from around 2,000 to nearly 3,750, the latter equating to about half of the roughly 7,500 employees Twitter had at the start of this year.
The exact scope and duration of the Tesla employees’ work at Twitter, and whether there is any contractual relationship that reimburses the vehicle maker, couldn’t be determined.
Mr. Musk’s reliance on employees from publicly traded Tesla to assist in turning around his social-media company raised questions with some corporate governance experts.
Tesla’s board ought to be monitoring the length and intensity of the Tesla employees’ deployment to Twitter, said Jeffrey Sonnenfeld, a professor at the Yale School of Management. A longer assignment could be of particular concern, he said.
“Is there any expected return for Tesla from any of this? It’s hard to see it,” Dr. Sonnenfeld said.
Tesla regularly discloses various transactions with SpaceX in regulatory filings. Last year, SpaceX paid Tesla $2.8 million for vehicle components and related labor and support, $40,000 for solar modules and $100,000 for refurbished power supplies and related services, a securities filing showed. SpaceX, meanwhile, charged Tesla $500,000 for use of a private plane. And in 2020, SpaceX paid Tesla around $100,000 after the car maker agreed to temporarily assign roughly 20 employees to the rocket company to provide technical support, securities filings showed.
Brian Mulberry, a portfolio manager at Tesla investor Zacks Investment Management Inc., said he wasn’t concerned about Mr. Musk’s use of Tesla engineers at Twitter, at least for now. If the situation continues for several months, that would be another matter, he said.
“If the senior management is spending too much time solving other people’s problems, then they’re not solving their own at Tesla,” Mr. Mulberry said.
