Elon Musk Has Broken Even on X? How did he achieve it

Since Elon Musk's takeover of Twitter (now rebranded as X) in October 2022, the platform has undergone one of the most aggressive cost-cutting transformations in corporate history. With a projected $3 billion negative cash flow, Musk had to make drastic financial decisions to stabilise the company. Now, with reports that X has finally 'broken even' on his investment, it is evident that these measures have significantly improved the company’s financial position.

How Musk Slashed Costs to Keep X Afloat

1. Mass Layoffs and Workforce Reduction

Musk reduced Twitter’s 7,500 employees to less than 1,500, cutting approximately 80% of the workforce. While this led to significant payroll savings, it also resulted in increased outages, slower feature rollouts, and security concerns.

2. Cutting Cloud & IT Expenses

Musk cancelled contracts with major cloud service providers, such as Amazon Web Services and Google Cloud, reportedly saving nearly $1 billion. One of X’s three data centres was also shut down, reducing infrastructure costs but increasing the risk of system failures.

3. Halting Rent Payments & Office Closures

In a bold move, X stopped paying rent on several office spaces, including locations in San Francisco, London, and Singapore. The company was sued by landlords but saved millions in real estate costs. Additionally, Musk auctioned off office furniture and kitchen equipment to generate extra cash.

4. Eliminating Employee Perks & Benefits

No more free food ($13M annual cost cut). Wellness perks removed.
Travel budgets eliminated These cuts helped further stabilise X’s financial position but significantly impacted employee morale.

Why Cost-Cutting Was Beneficial

Musk’s bold cost-cutting measures were controversial but instrumental in stabilising X’s financial position. By slashing expenses on salaries, infrastructure, office space, and perks, the company managed to recover its initial valuation despite a fall in revenue. While concerns persist over long-term sustainability and innovation, these reductions delivered immediate financial relief and kept X operational.

This transformation highlights that businesses can attract investors by optimising costs, rather than prioritising revenue growth at the expense of profitability

#ElonMusk #X #Twitter #CostCutting #BusinessStrategy #TechNews #FinancialTurnaround