Twitter’s Nightmare: How Elon Musk’s Cost-Cutting Measures Killed Its Ad Revenue

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Twitter is one of the most popular and influential social media platforms in the world, with over 300 million monthly active users and billions of tweets posted every day. It is also one of the most profitable, with an advertising revenue of $5.1 billion in 2021.

However, things took a dramatic turn for the worse when Twitter was bought by Elon Musk, the billionaire entrepreneur and founder of Tesla and SpaceX, for $44 billion in October 2022. Since then, Twitter has lost almost half of its advertising revenue, as well as millions of users and advertisers, who have migrated to rival platforms such as Threads, a new app designed by Meta (formerly Facebook) that connects to Instagram.

How did this happen? What did Elon Musk do to Twitter that caused such a disaster? And what are the implications and consequences of this nightmare scenario for Twitter and its stakeholders? In this blog, we will explore these questions and reveal the shocking truth behind Twitter’s downfall.

What did Elon Musk do to Twitter?

Elon Musk is known for his visionary and ambitious projects, such as colonizing Mars, revolutionizing transportation, and advancing artificial intelligence. He is also known for his unconventional and controversial decisions, such as smoking weed on a podcast, calling a British diver a pedophile, and tweeting about taking Tesla private.

When he acquired Twitter, he said he wanted to make it “the best platform for free speech and open dialogue” and “a force for good in the world”. However, his actions soon proved otherwise.

One of the first things he did was to fire about half of Twitter’s 7,500 staff, in an effort to cut costs and streamline operations. He also reduced the salaries and benefits of the remaining employees, and closed several offices around the world. He said he wanted to make Twitter “leaner and meaner”, but many saw it as a ruthless and reckless move that demoralized and alienated the workforce.

Another thing he did was to change the content moderation rules and algorithms of Twitter, in an attempt to curb misinformation, abuse, and manipulation on the platform. He said he wanted to make Twitter “more transparent and accountable”, but many saw it as a biased and arbitrary move that censored and silenced diverse voices.

He also introduced new limits and restrictions on how many tweets users can read and post per day, depending on their verification status and account age. He said he wanted to “address extreme levels of data scraping and system manipulation” by third-party platforms, but many saw it as a restrictive and oppressive move that hampered and discouraged user engagement.

He also announced that TweetDeck, a popular program that allows users to monitor several accounts at once, will only be available to verified users from next month. He said he wanted to “enhance the quality and security” of the platform, but many saw it as an elitist and exclusive move that favored and privileged certain users over others.

How did these measures affect Twitter’s ad revenue?

These measures had a devastating impact on Twitter’s ad revenue, which is its main source of income. Advertisers are attracted to Twitter because of its large and active user base, its rich and diverse content, its high engagement and reach rates, and its innovative and flexible ad formats.

However, these measures drove away many users and advertisers from Twitter, who felt betrayed and disappointed by the changes. Users complained about the loss of functionality, freedom, and fun on the platform. Advertisers complained about the loss of visibility, relevance, and effectiveness of their ads on the platform.

As a result, Twitter’s ad revenue plummeted by almost 50% since Elon Musk’s takeover, from $5.1 billion in 2021 to $3 billion in 2023. This is despite Elon Musk’s claim that most advertisers had returned to the site after his interview with the BBC in April 2023.

Twitter’s ad revenue decline was also exacerbated by the rise of Threads, a new app that connects to Instagram and offers users a more seamless and integrated social media experience. Threads has gained over 150 million users since its launch in June 2023, with India leading the way. Threads has also attracted many advertisers who prefer its larger and more engaged audience, its more appealing and immersive content, its more personalized and targeted ads, and its more reliable and secure platform.

What are the implications and consequences of this nightmare scenario?

This nightmare scenario has serious implications and consequences for Twitter and its stakeholders. Some of them are:

  • Loss of market share and value: Twitter has lost its competitive edge and position in the social media market, as it faces stiff competition from Threads and other platforms. Twitter’s market value has also dropped by more than 60% since Elon Musk’s takeover, from $44 billion to $17 billion.
  • Loss of reputation and credibility: Twitter has lost its reputation and credibility as a platform for free speech and open dialogue, as it faces criticism and backlash from users, advertisers, regulators, and civil society groups. Twitter’s credibility as a source of information and news has also been damaged by the spread of misinformation, abuse, and manipulation on the platform.
  • Loss of innovation and creativity: Twitter has lost its innovation and creativity as a platform for rich and diverse content, as it faces limitations and restrictions on its functionality, features, and formats. Twitter’s creativity as a source of entertainment and culture has also been diminished by the loss of fun and humor on the platform.


Twitter’s nightmare scenario is a shocking and sad story that shows how a visionary and ambitious entrepreneur can ruin a successful and influential platform with his unconventional and controversial decisions. It is a cautionary tale for other social media platforms and businesses that want to avoid the same fate. It is also a wake-up call for Twitter users and advertisers who want to reclaim their rights and voice on the platform.

I hope you found this blog useful and informative. If you have any feedback or suggestions for me, please let me know. I would love to hear from you.

What do you think?

Written by Nilanjan

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