Twitter has stopped paying rent on offices and is considering not paying severance packages to former employees, among other measures.
SAN FRANCISCO — Over the past two weeks, Elon Musk has shaken up Twitter’s legal department, disbanded a council that advised the social media company on safety issues and is continuing to take drastic steps to cut costs.
Mr. Musk appears to be gearing up for legal battles at Twitter, which he purchased in October for $44 billion, according to seven people familiar with internal conversations. He and his team have revamped Twitter’s legal department and pushed out one of his closest advisers in the process. They have also instructed employees to not pay vendors in anticipation of potential litigation, the people said.
To cut costs, Twitter has not paid rent for its San Francisco headquarters or any of its global offices for weeks, three people close to the company said. Twitter has also refused to pay a $197,725 bill for private charter flights made the week of Mr. Musk’s takeover, according to a copy of a lawsuit filed in New Hampshire District Court and obtained by The New York Times.
Twitter’s leaders have also discussed the consequences of denying severance payments to thousands of people who have been laid off since the takeover, two people familiar with the talks said. And Mr. Musk has threatened employees with lawsuits if they talk to the media and “act in a manner contrary to the company’s interest,” according to an internal email sent last Friday.
The aggressive moves signal that Mr. Musk is still slashing expenditures and is bending or breaking Twitter’s previous agreements to make his mark. His reign has been characterized by chaos, a series of resignations and layoffs, reversals of the platform’s previous suspensions and rules, and capricious decisions that have driven away advertisers.
Mr. Musk did not respond to a request for comment.
As he has transitioned into the role of Twitter’s new leader, Mr. Musk has had a cast of rotating legal professionals by his side. In October, he fired both Twitter’s chief legal officer and general counsel “for cause” within hours of closing his acquisition and installed his personal lawyer, Alex Spiro, to head up legal and policy matters at the company.
Mr. Spiro is no longer working at Twitter, according to six people familiar with the decision. Those people said that Mr. Musk has been unhappy with some of the decisions made by Mr. Spiro, a noted criminal defense lawyer who successfully defended the billionaire in a high-profile defamation case in late 2019 and worked his way into the Twitter owner’s inner circle.
Among those decisions was Mr. Spiro’s call to retain the Twitter deputy general counsel, James A. Baker, through Mr. Musk’s various rounds of layoffs and firings. Mr. Baker had served as general counsel at the F.B.I. until May 2018 — advising the agency on politically fraught investigations into Hillary Clinton’s private email server and Donald J. Trump’s campaign — and joined Twitter in 2020.
Last week, Mr. Musk said he terminated Mr. Baker after he learned that the lawyer had been responsible for reviewing internal communications about the company’s decision to suppress a 2020 New York Post story about Hunter Biden’s laptop. Mr. Musk had ordered that those communications, which he has called the “Twitter Files,” be given to a group of journalists to release and discredit the decision-making of the company’s past executives.
More on Elon Musk’s Twitter Takeover
- An Established Pattern: Firing people. Talking of bankruptcy. Telling workers to be “hard core.” Twitter isn’t the first company that witnessed Elon Musk use those tactics.
- Rivals Emerge: Sensing an opportunity, new start-ups and other social platforms are racing to dethrone Twitter and capitalize on the chaos of its new ownership under Mr. Musk.
- The ‘Twitter Files’: Mr. Musk and Matt Taibbi, an independent journalist, set off an intense debate with a release of internal Twitter documents regarding a 2020 decision to restrict posts linking to a report in the New York Post about Hunter Biden.
- Hard Fork: The Times podcast looks at Mr. Musk’s two-day clash with Apple, which he had accused of trying to sabotage Twitter before saying the “misunderstanding” had been resolved.
With Twitter drained of legal talent from layoffs and departures, Mr. Musk has sought lawyers from his other companies, including rocket maker SpaceX, to fill the void. More than half a dozen lawyers from the space exploration company have been given access to Twitter’s internal systems, according to two people and documents seen by The Times. SpaceX employees who have been brought in to Twitter include Chris Cardaci, the company’s vice president of legal, and Tim Hughes, its senior vice president, global business and government affairs.
A SpaceX spokesman did not return a request for comment.
Among its legal challenges, Twitter is facing more questions from the Federal Trade Commission, which is investigating whether the company is still adhering to a consent decree. In 2011, the company signed a consent decree with the F.T.C. after two data breaches and said it would not mislead users about privacy protection. In May, the company paid $150 million to the F.T.C. and Justice Department to settle allegations that it had violated the terms of that consent decree, which was expanded.
The F.T.C. has sent Twitter letters asking whether it still has the resources and staff to adhere to the consent decree, two people with knowledge of the matter said. An F.T.C. spokeswoman declined to comment.
On Friday, as Mr. Musk encouraged the release of internal information through the continuation of his Twitter Files, he also sent an email to employees noting “many detailed leaks of confidential Twitter information” showed that some were violating their nondisclosure agreements.
“If you clearly and deliberately violate the NDA that you signed when joining Twitter, you accept liability to the full extent of the law and Twitter will immediately seek damages,” he wrote. The email was first reported by the Platformer newsletter.
Mr. Musk’s team has also deliberated the merits of not paying severance to the thousands of people who have left the company since he took over, when there were about 7,500 full-time employees. While Mr. Musk and his advisers had previously considered forgoing any severance when discussing cuts in late October, the company ultimately decided that U.S.-based employees would be given at least two months of pay and one month of severance pay so that the company would be compliant with federal and state labor laws.
Mr. Musk’s team is now reconsidering whether it should pay some of those months, according to two people familiar with the discussions, or just face lawsuits from disgruntled former employees. Many former employees still have not received any paperwork formalizing their separation from Twitter, five people said. Mr. Musk has already refused to pay millions of dollars in exit packages to executives he claims were terminated “for cause.”
As Twitter has downsized, Mr. Musk’s team has been hoping to renegotiate the terms of lease agreements, two people familiar with the discussion said. The company has received complaints from real estate investment and management firms including Shorenstein, which owns the San Francisco buildings that Twitter occupies.
A spokesman for Shorenstein declined to comment.
In other money-saving moves, Twitter has laid off its kitchen staff and begun to list office supplies, industrial-grade kitchen equipment and electronics from its San Francisco office for auction.
Mr. Musk also continues to cut staff and leaders, including Nelson Abramson, Twitter’s global head of infrastructure, and Alan Rosa, the global information technology head and vice president of information security, according to four people familiar with the moves.
On Sunday night, Mr. Musk sent two emails to Twitter’s staff with advice about how to work for him that he had previously shared with SpaceX and Tesla employees. One message focused on first principles thinking, a worldview based on the teachings of Aristotle to reduce assumptions to basic axioms, which Mr. Musk credited with helping him make difficult decisions. The other advocated against workplace hierarchies.
On Monday, Twitter notified members of its trust and safety council, an advisory group formed in 2016, that it would dissolve immediately. The council was created to guide Twitter through challenging safety problems and content moderation issues, and was made up of organizations focused on civil rights and child safety.
“Safety online can mean survival offline,” said Jodie Ginsberg, the president of the Committee to Protect Journalists, one of the organizations involved in the council. “As a platform that has become a critical tool in both open and repressive countries, Twitter must play a constructive role in ensuring that journalists and the public at large are able to receive and impart information without fear of reprisals.”
Michael S. Schmidt contributed reporting. Kitty Bennett contributed research.