Musk’s Twitter purchase was a leveraged buyout
Some people are giving Musk a pass for today’s layoffs because Twitter is unprofitable and needs to cut costs. But the real pressure for cost cutting and the layoffs is that Musk purchased Twitter via a leveraged buyout. He loaded the company with $10B of additional debt and now is facing annual $1B interest payments. The dramatic layoffs with no severance are thus the result of Musk’s decision to buy the company and the acquisition strategy of using a leveraged buyout.