SUMMARY
The Elon Musk-led management has let go of 150 members from Twitter’s India team. What next for Twitter in the Indian market?
Even in a year where layoffs have become sadly commonplace, the exits and dismissals at Twitter in India and around the world seem different and almost surreal.
In just a few days after Elon Musk’s takeover, several prominent Twitter India employees announced the company had laid them off. The official letters are only now being sent to employees, and by the end of the weekend, the true extent of the layoffs will become more clear.
Before we dive into the Twitter India mess and Elon Musk’s many challenges, let’s look at the other top stories this week:
- Nykaa’s Slow Quarter: It’s a tough time to be an ecommerce marketplace and even beauty giant Nykaa is suffering with adverse market conditions pinching growth in the latest quarter
- Freshworks’ New Tangle: Just over a year after its grand listing on Nasdaq, Freshworks now faces a lawsuit that is threatening to snowball into a major class action litigation. So what went wrong?
- ONDC Sellers Vs Dunzo: Dunzo’s ONDC foray has sellers accusing the Reliance-backed company of potentially misusing data to boost its quick commerce business
Twitter’s Titanic Moment
While Musk’s Twitter deal has made headlines around the world, the job of turning things around at the social media giant was never going to be easy.
The world’s richest person was already under immense pressure from public figures after allegations of abuse growing on Twitter since his takeover. In the US, high-level employees including CEO Parag Agrawal had been let go, which had sparked fears in India too.
India Offices Cleared
The new management is said to have laid off nearly half of the 300-member team in India, many of whom, including the communications head, took to Twitter to post about their dismissals, to speak out about their experience.
Raheel Khursheed, the former Twitter India head, told us that while many employees must have seen the development coming, it is still a bad situation at the offices.
The layoffs are in stark contrast to Twitter India’s optimism under Agrawal, when the company was actively hiring for its India ops. Now, employees in India and other countries are being informed about whether they are being retained.
Twitter’s India Woes
The layoffs are the latest in a growing list of problems for Twitter in India. India is home to its third largest user base, contributing more than 25 Mn users.
Indian Prime Minister Narendra Modi is amongst the top 10 most followed accounts globally, but as Khursheed revealed, “India does not contribute a lot to Twitter’s bottom line revenue despite being an important user growth market.”
Plus, Twitter India has dragged the government to court over orders to block accounts entirely instead of taking action against particular tweets for minor offences.
The layoffs have only served to complicate Twitter’s position in terms of compliance with laws. It remains to be seen exactly which positions have been retained by the company for the India operations.
Dismissals of certain positions might fall foul of India’s intermediary guidelines for social media companies. Platforms such as Twitter need to appoint a chief grievance officer, chief compliance officer and a nodal contact person.
Vinay Prakash was appointed as the chief compliance and grievance officer while former Bytedance executive Shahin Komath was appointed as the nodal contact person. Their LinkedIn bios are currently unchanged and both are apparently still with the company.
Musk’s Revenue Plans
Besides layoffs, Musk is looking to generate new streams of income for Twitter and reduce costs drastically. He announced plans to charge users up to $8 for the verified badge (price will vary as per country) to monetise the most active user base.
Musk also tweeted that the downsizing was forced by the fact that Twitter was losing over $4 Mn per day.
The question of course is what will the price be in India. Musk added that the price would be adjusted according to purchasing power parity, so it could cost around INR 70 per month in India or roughly thereabouts.
Whatever the price, is a Twitter verified account attractive enough for anyone to pay a monthly subscription? CRED cofounder Kunal Shah’s Twitter poll showed that a majority of people might not.
Musk sold Tesla stock worth more than $8 Bn to finance the $44 Bn Twitter deal. He brought on private equity investors immediately after taking over.
Prince Alwaleed bin Talal bin Abdulaziz of Saudi Arabia is now the second-largest investor, while Qatar Investment Authority has also backed the company. Twitter cofounder Jack Dorsey continues to remain invested and has a 2.4% stake in the company.
Now that it’s a private company, Twitter will face all the same problems that tech startups and companies around the world are facing — as seen in over 15K layoffs and severe cost-cutting in India.
If Twitter has to make the most of the India user base, it has to customise its offerings for the Indian market. Doing what works in the US might not fly in India just as well — particularly when it comes to additions such as bypassing paywalls and priority mentions.
If those are the only perks that come for Indians after paying a monthly fee, Twitter might remain a niche social media platform that only attracts the top layer of the Indian internet ecosystem, instead of the centre-stage for online discourse that it wants to be.
✨ Sunday Roundup: Funding, Tech Stocks & More
- Startup Funding This Week: Indian startups raised $394 Mn across 22 deals this past week, with SaaS unicorn Icertis’s $150 Mn round contributing nearly half to this tally.
- Startup Losses On The Rise: SoftBank-backed GlobalBees, Dunzo, ZestMoney and logistics tech unicorn Shiprocket all reported major losses for FY22
- MamaEarth Turns A Profit: On the other hand, D2C brand MamaEarth bucked the loss-making trend to report a profit of INR 20 Cr
- 30 Startups To Watch: The October edition brings our picks of 30 sector-agnostic early-stage startups, working in diverse sectors such as agritech, EV, healthtech, blockchain, gaming and more
- Xiaomi In Hot Waters? The Chinese tech giant allegedly misled its banker Deutsche Bank for years over a non-existent royalty agreement related to its India business
- Ola In Italy: Ola is set to make its European debut with a presence at an auto show in Italy. Is this a precursor to a launch?
That’s all for this Sunday.
Till we see you next week,
Team Inc42
