Twitter has warned its employees that their annual bonus could be half of what they’re used to, as the company continues to battle economic uncertainty.
The New York Times reported that the social media giant made the announcement in an email to employees, blaming its financial performance for the potential bonus cut.
According to NYT, the company suffered a net loss for the first time since 2020 when it announced its quarterly earnings last month.
Advertisers have battened down the hatches and cut spending on the platform, amid economic fears over the war in Ukraine. Additionally the company is locking horns in a legal battle with Elon Musk over a potential complete a $44 billion sale.
Musk agreed to buy Twitter in April but has since tried to back out, prompting Twitter to launch legal action in a bid to see the deal through.
In the email to employees, Ned Segal, Twitter’s chief financial officer, said these challenges would probably affect the annual bonuses that they receive, with the bonus pool currently at 50 percent of what it could be if the company met its financial targets.
A Twitter spokesman confirmed the accuracy of the email but did not comment further.
Tech firms in turmoil?
Other major tech firms have also re-examined their finances due to the current economic uncertainty.
CNBC reported that Alphabet, the parent company of Google, would “slowing the pace” of its hiring plans for the rest of 2022.
CEO Sunder Pichai told employees in an email that it would reduce its hiring rate going forward, having taken on 10,000 new staff in the second quarter of this year already.
Meta has also scaled back its hiring plans and is “turning up the heat” on underperforming employees as the firm prepares for a “deep economic downturn.”
As reported by the Reuters news agency, Mark Zuckerberg, CEO of the company previously known as Facebook, told staff in a weekly Q&A: "If I had to bet, I'd say that this might be one of the worst downturns that we've seen in recent history”.
Meta has reduced its target for hiring engineers in 2022 to around 6,000-7,000, down from an initial plan to hire about 10,000 new engineers, Zuckerberg said.
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Meta confirmed hiring pauses in broad terms last month, but exact figures have not previously been reported.
In addition to reducing hiring, he said, the company was leaving certain positions unfilled in response to attrition and "turning up the heat" on performance management to weed out staffers unable to meet more aggressive goals.
"Realistically, there are probably a bunch of people at the company who shouldn't be here," Zuckerberg said.
"Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn't for you, and that self-selection is OK with me," he said.
The company must "prioritize more ruthlessly" and "operate leaner, meaner, better executing teams," Chief Product Officer Chris Cox wrote in the memo, which appeared on the company's internal discussion forum Workplace before the Q&A.
"I have to underscore that we are in serious times here and the headwinds are fierce. We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets," Cox wrote.
The memo was "intended to build on what we've already said publicly in earnings about the challenges we face and the opportunities we have, where we're putting more of our energy toward addressing," a Meta spokesperson said in a statement.