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Musk orders Twitter to cut infrastructure costs by $1 billion – sources

Musk orders Twitter to cut infrastructure costs by $1 billion – sources

Nov. 3 (Reuters) – Elon Musk instructed teams at Twitter Inc. to find up to $1 billion in annual savings in infrastructure costs, according to two sources familiar with the matter and an internal Slack message reviewed by Reuters, raising concerns that Twitter could fall during high-traffic events such as the US midterm elections.

The company aims to save between $1.5 million and $3 million a day on servers and cloud services, according to a Slack message, which calls the project a “Deep Cuts Plan.”

Twitter is currently losing about $3 million a day “with all costs and revenue taken into account,” according to an internal document reviewed by Reuters.

Twitter did not immediately respond to a request for comment.

Sudden infrastructure cuts could put the Twitter website and app at risk of crashing during critical events when users rush to Twitter to consume and share information, such as moments of crisis or major political events, the sources said.

The social media platform is investigating whether to reduce the extra server space it keeps to ensure Twitter can handle the heavy traffic, one source said.

“(Musk) is willing to take that risk to meet these goals,” the person said.

Another source described the proposed cuts as “misguided”, adding that when user traffic increases, the service could collapse “in spectacular ways”.

Teams across Twitter are racing to present a plan to achieve the savings by a Nov. 7 deadline, according to one of the sources and a Slack message. Some employees were ordered to work in the office every day of the week to meet the deadline, the source said.

The cost reduction could also be due to reduced spending on Google Cloud services, the source said.

A Google Cloud spokesperson declined to comment.

Reporting by Sheila Dang in Dallas, Paresh Dave in Oakland, Calif., and Katie Paul in Palo Alto, Calif.; Editing: Kenneth Li, Matthew Lewis and Richard Pullin

Our standards: Thomson Reuters Trust Principles.

Paresh Dave

Thomson Reuters

Tech reporter based in the San Francisco Bay Area covering Google and the rest of Alphabet Inc. He joined Reuters in 2017 after four years at the Los Angeles Times focused on the local technology industry.



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