Twitter: Elon Musk’s Acquisition Harms Employees and User Base (2022)

ABSTRACT

Twitter CEO Elon Musk

            Elon Musk’s 44 billion dollar acquisition of social media company Twitter has had the public talking. The new billionaire CEO has laid off over half of his workforce, as well as both, directly and indirectly, allowed the spread of misinformation in just the first month since purchasing the company. An Individualist would argue for the case to be unethical as Musk is not maximizing the profit of the company within the law. Under utilitarianism, his actions would be considered unethical due to the harm of his actions outweighing the little happiness they provide. Kantianism would classify Musk’s actions as unethical due to their failure to lack rationality. A Virtue Theorist would consider Musk an unethical person from the lack of virtues shown in his behavior. I, and hopefully you once you finish reading this, believe that the actions of Elon Musk toward Twitter employees and users are heavily unethical.

ETHICS CASE CONTROVERSY

Twitter Under Musk Timeline

            Twitter is a social media application that allows users to post thoughts, images, and videos as “tweets”. Billionaire and multi-business owner Elon Musk was in talks to buy the company back in April 2022. However, it was not until October 27 of the same year that he officially bought Twitter for 44 billion US dollars. Musk’s vision for the app was to remove the censorship and bring back his version of free speech. Upon acquisition of the company, his first action as the new owner was to fire the top executives, including former CEO Parag Agrawal and CFO Ned Segal, just a glimpse of what was to come over the next month (Conger et al.). Purchasing Twitter at such an enormous amount, one that required taking on 13 billion in debt, had made the new CEO’s mission clear: reduce costs (Griffin).

The next day, Musk told the remaining executives to prepare for widespread layoffs before employee bonuses were sent out on November 1. However, he decided to push till after the issuances out of risks of potential lawsuits. On November 3, employees received an email letting them know that they will receive another email the next day with their employment status. However, some employees were locked out of their accounts before the day had ended. A class action lawsuit was filed against the company in San Francisco for violating California’s Worker Adjustment and Retraining Notification Act which says that employers must give at least a 60-day notice before mass layoffs. By the next day, almost half of the company’s 7500 global employees were gone. After receiving major backlash from the public, Musk said that all laid-off employees were getting 3 months’ severance, which is 50% more than the required amount (Palmer). Major companies including General Motors and Volkswagen Group pause their advertisements until they see what direction the company is heading (Vranica et al). Musk later tweeted that Twitter is losing 4 million dollars a day. Meanwhile, the remaining employees were tasked with creating a paid subscription that allowed their users to become verified. Musk imposed strict deadlines, with some employees going as far as to sleep at the office to reach them (Conger et al.). By November 9, the subscription Twitter Blue was rolled out to iOS users for 8 dollars a month. Problems arose quickly, with widespread impersonations afflicting the app and having major real-life consequences. One account impersonating insulin manufacturer Eli and Lilly Company tweeted out that insulin was now free of charge. After a couple of hours, the tweet was removed, but the damage was already done. Eli and Lilly’s stock price plummeted, with an estimated loss of 15 billion dollars to their market cap (Barr). With mass impersonations and misinformation spreading, Twitter Blue was removed from the app only two days after its launch.

Timeline continued

The following week saw another wave of layoffs. Contract workers in engineering, marketing, and customer service were the first to be let go this week. Musk issued an ultimatum to the remaining employees, having them choose between either working long, intense hours or accepting the severance package (Kolodny et al.). He also removed the ability to work from home, which would prove to be a mistake. Two more class actions were filed; the first lawsuit claims that removing the ability to work from home goes against the Americans with Disabilities Act (ADA), while the other one claims employment laws were violated in the layoffs for contract workers (Wiessner). By the next week, Twitter was estimated to have lost another 1000-1200 employees (Mac et al.). Musk announces that an improved version of Twitter Blue will come back once the impersonations stop. The newer version of the subscription will have different color verification depending on whether the account belongs to a brand, government official, or an individual (including celebrities and people with Twitter Blue), making it easier to identify a possible impersonator. As a part of Musk’s goal to make Twitter a more free, less restrictive space, previously suspended accounts are being brought back. The COVID-19 misinformation policy, which labeled certain tweets that talked about the virus as misleading, was also removed, with experts saying it could have serious consequences (Ivanova).

STAKEHOLDERS

Any party that is affected by the decisions of Elon Musk would be considered a stakeholder. This would include all Twitter employees, their user base, and shareholders invested in Musk’s other publicly traded companies, including Tesla. From the first day Musk took ownership of the company, top executives were fired. Massive layoffs caused over half of the company’s global employees, an estimated 4,800, to be let go. Twitter Blue allowed anybody with 8 dollars to impersonate a person or company, spreading misinformation to anyone who sees that account not knowing they are the official account. The COVID-19 policy getting removed only further increases the spread of misinformation. The consequences are unfathomable when you realize Twitter usage is at an all-time high of 254 million active users a day (Best). Musk’s other multi-billion dollar company Tesla has seen a major hit to its stock price, with it reaching a 52-week low this past week (Raymond).

INDIVIDUALISM

Twitter Headquarters in San Francisco

Under individualism, the goal of the company is to maximize its profits for the owners of the business in a legal way. From the beginning, all of Elon Musk’s decisions have been to maximize profits. He has laid off over half of Twitter’s workforce, as well as created the subscription service Twitter Blue to bring in more revenue. However, not all of the actions to maximize profit have been within the law. In California, where Twitter’s headquarters reside, it is illegal to execute mass layoffs of employees without at least a 60-day warning under the California WARN Act. Musk also remove the remote work policy, in hopes that going into the office would increase the productivity of workers. This also violates laws set by the ADA, which allows remote work as an acceptable accommodation as long as it put no significant hassle on the employer (Wiessner). He also stopped the purchase of Twitter Blue two days after its launch, something that could have increased profits if left available to purchase for longer. The bad press that comes along with these actions has stopped many major companies from using Twitter for advertising, ultimately making the actions lose more money.

To an Individualist, these actions taken by Musk would be considered ethically wrong. Individualism stresses that, “it is the aim and the responsibility of businesses to maximize their profits” (Salazar 17). Increasing profit in one area just to lose profit in another would not go work for an Individualist, especially if those actions were illegal. If Musk were to have given a warning to its employees within the legal limit, as well as kept the remote working policy, he would still be able to cut costs while staying within the law which is ethical under Individualism.

UTILITARIANISM

Utilitarianism stresses the importance of happiness. A Utilitarian considers an action ethical as long as it creates more overall good than bad. In other words, for an action to be ethical under utilitarianism, it would have to, “maximize happiness in all affected parties in the long-term” (Salazar 20). In the case of Elon Musk and his actions as CEO, Utilitarians would consider his actions unethical.

The efforts Musk has implemented over his first month as the owner goes against everything Utilitarians value. Laying off over half of his workforce leaves an estimated 4,700 unhappy people without jobs and one person happier as they have fewer costs. Twitter Blue may supply some happiness to individuals impersonating brands or celebrities, but for every account impersonating, there is a person or company whose reputation is possibly being damaged. Then there are all the people absorbing the misinformation by the impersonators who are now worse off than they were before. Forcing all employees, including ones with disabilities, to come back to the office only makes Musk happy, while the employees, some who physically cannot get to the office, are stuck with having to a severance package over their job. The strict deadlines and intense working hours create a harsh environment for the workers whose job was much easier just over a month ago. These actions all only benefit one person, Elon Musk, while leaving thousands of employees and millions of Twitter users less happy than before Musk came into power, something a Utilitarian would heavily disagree with.

KANTIANISM

An ethical action under Kantianism is rational and has the right motivations. To determine whether or not an action is rational or not, a series of tests known as the Categorical Imperative are used to find out if the action is permissible or impermissible. We can apply these tests to the actions Elon Musk has employed over his first month as CEO of Twitter to figure out if his actions, under Kantianism, are ethical.

Manager Esther Crawford Sleeping at the Office

The first of the Categorical Imperative tests is the Formula of Universal Law, which tests if it would be possible if everybody in the world to follow through with the same action. If we were to consider the mass layoffs Musk gave his employees, it would fail the test. If every company in the world was to lay off half of its employees without giving proper notice, billions of people would be left without jobs and unable to provide for their families. Not to mention the countless lawsuits brought up because of it. Another way to test for rationality would be through the Formula of Humanity, which asserts that, “it is wrong to use people as a mere means to get what you want” (Salazar 22). Considering all the major actions Musk put his employees and users through, they would fail the test. Creating a subscription service to increase revenues is using the user base simply as a means to get more money. The layoffs also fail this test, as Musk is laying off employees as a means to reduce overall costs. The final test in the Categorical Imperative is the Formula of Autonomy, stating that we must abide by the actions we place on others. When applying this to the strict deadlines and harsh working conditions Musk puts on his employees, we have to ask whether or not Elon himself would like to have to sleep at the office to meet those deadlines or have to work long hours at high intensity. If any of the tests yielded a permissible action, it would not have the correct motivation. The actions Musk implemented in the first month as the owner were to help himself, not the employees or the user base, leading any Kantian to believe that his actions were, in fact, unethical.

VIRTUE THEORY

Virtue theory emphasizes acting with virtuous traits and in doing so will lead you to live an overall better and flourishing life. A virtue is a positive characteristic allowing things to run better. This ethical theory is different from the other three as they, “analyze individual actions whereas virtue theory analyzes a person’s character” (Salazar 23). The four cardinal virtues one can possess are courage, temperance, justice/fairness, and honesty, along with one intellectual virtue known as prudence. Looking at Elon Musk during his new reign over Twitter, a virtue theorist would find him to be unethical.

We can see Musk not acting on good virtue the day he bought Twitter. One could say that Musk buying the company was courageous but looking at what he had to do to make up for it, such as taking on 13 billion in loans, Musk would have been considered to act rashly and impulsive, which are both vices. Vices are the opposite of virtues and lead a person’s life in the opposite direction of what virtue theorists would accept. Musk would also not possess the justice/fairness virtue. It is not fair to the employees who have been working at Twitter for a long time to all of sudden be laid off by someone who just took over. Even if you did nothing wrong, you could have been laid off and stuck with having to find a new place to work. Musk also does not show the intellectual virtue of prudence, or the ability to make rational decisions considering the future. It is unlikely that he would have bought Twitter for such a high amount knowing the major effects of it, including having to lay off over half the workforce, companies pausing their advertisements, and a major toll on his other company’s stock Tesla, just to name a few. Musk acting with more vices than virtues not only will lead to a worse, dull life but is also considered unethical under virtue theory.

JUSTIFIED ETHICS EVALUATION

Popular Tweet Denying Facts about COVID-19

            From my perspective, I believe Elon Musk is in the wrong. He should have known that 44 billion dollars were too much for the company, and now he is taking it out on the employees. Musk should have given a 60-day warning before the mass layoffs to not only be following the law but also to be a decent person and help the employees out; giving them more time to look for a job. Imposing strict deadlines to the point where workers had to sleep at the office crosses the line. Taking away the remote work possibility not only affects employees with disabilities who struggle to come to the office but also hurts the workers who signed up as remote workers and have never been to the office. I thought Twitter Blue was okay in concept, but the execution was a disaster. It was clear from the announcement of the service that it would be heavily abused from the get-go. His reforms around freedom of speech can cause more harm than good, especially with the removal of the COVID-19 misinformation policy and the addition of previously suspended accounts. I think freedom of speech is a good thing, except when it is used to hurt people or a demographic, such as hate speech or misinformation. I believe the three lawsuits filed against Twitter are in good faith and have a higher chance of winning over Musk. When reviewing the facts of the case, it is clear that the actions exhibited by Elon Musk were highly unethical.

CONCLUSION

Elon Musk has made many questionable decisions since he acquired Twitter back in October. He laid off over half his staff without a proper warning. Misinformation was able to spread through his new policies as well as through his new service Twitter Blue. According to each of the ethical theories, including Individualism, Utilitarianism, Kantianism, and Virtue Theory, Elon Musk and his actions are unethical. I, along with probably most of you reading this, believe that Musk is clearly in the wrong, and only time will tell how the law agrees with us too.

REFERENCES

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