Abstract
Twitter CEO Elon Musk Twitter, a social media company created in San Francisco in 2006, has had five total CEOs in its life up until the middle of autumn this year. In mid-April, Tesla CEO Elon Musk began the acquisition of Twitter. Despite Musk finding some minor wording in the deal displeasing, Musk finalized the acquisition after over half a year.
Ethics Case Controversy
Twitter and Elon Musk have had many ethical controversies in the short time since he has taken over the company. His first and foremost ethical controversial decision comes on October 28th (the first day he took over the company) with the idea to lay off half the company. He discusses doing this urgently because many employees are due for bonuses at the end of the month. Musk insists that these employees must be laid off before November 1st and stated that he is used to going to court over similar issues. This decision by Musk was changed after realizing the true cost it would be to go to court rather than paying the bonuses (Conger). But the question arises, was this an ethical thought? It certainly doesn’t agree with utilitarianism, but is it in line with individualism? Was he trying to make this decision to save the company some money and allow it to be reinvested into the company? Ultimately, we don’t know because the decision was changed. However, the decision to still lay off half of all employees at the company after November 1st certainly posed ethical questions.
Following this big slash in Twitter’s employment figure, Musk lost multiple executives; some through his own firing and others by choice of departure. Musk then made steep demands of his employees still left, including getting a new premium subscription service called Twitter Blue out to the public within one week. Starting from scratch, the project team spent countless hours in the office to make sure the product launched when their supervisor demanded it. Ultimately Twitter Blue did launch on time, but due to the rushed process, there were flaws in the development of the service and it backfired dramatically and was pulled from app stores within a week (Kolodny). Twitter Blue developers and team members thought once the software was completed and released their long days would halt, at least for some time. Musk demanded the opposite, proposing an ultimatum to all employees left: Work long days at a high pace or leave. This also would be frowned upon from the standpoint of utilitarianism ethics, as it is not bringing happiness to the people Musk has put in this difficult decision. But the question keeps arising: As such a successful businessman, is Musk doing what is necessary to make Twitter the best its ever been and thus supporting other ethical points of view? So far, it doesn’t appear that way.
Fired Twitter executives Ned Segal, left, Parag Agrawal, center, and Vijaya Gadde, right
Musk also continued to make headlines as he uses Twitter to voice his own opinion on various different subjects, including politics. Musk, a once liberal-leaning individual, has shifted in recent years more and more toward a right-wing approach. Since acquiring Twitter, Musk has made several different comments on the platform that have been quite controversial for himself and his newly bought company. His continuous advocation for free speech and extremism of statements have caused partnering companies to not want to be affiliated with Twitter to save their own public image. Furthermore, his actions as Twitter CEO to restore and grant amnesty to banned accounts like Donald Trump’s has caused an uproar from some people, leading them to use other forms of social media in protest (Thorbecke). This is an ethical controversy because Musk is trying to do what he believes is right, but in doing so, he risks the health and well-being of his company and its future.
His actions have created repercussions for his company such as losing big revenue sources from partnered companies that shared their advertisements on Twitter. Without the partnerships and deals with advertisements, Twitter is at a huge loss of income which can have severe implications for its future. Musk is not ignorant of the fact that the company has not been off to a great start since he arrived, and he understands that they need to turn a profit soon. If they don’t, he reportedly told staff that bankruptcy could be high (Allyn). Bankruptcy could be one of the final stages in this adventure for Musk, but experts believe he won’t give up easily and will try to find a way to turn the company around.
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| Timeline of events since Elon Musk took over Twitter. |
With Twitter becoming a privately traded company again, it is difficult to find who still are stakeholders in the company. However, the top five Stakeholders in Twitter prior to going private and who are thought to still be stakeholders include The Vanguard Group Inc., Elon Musk, Morgan Stanley, BlackRock Inc., and State Street Corp. The Vanguard Group, Inc. has the largest stake in Twitter through various mutual funds, exchange-traded funds, and retirement products. As of March 31st, they owned 82.4 million Twitter shares. Elon musk, Twitter’s CEO, is the second largest stakeholder, holding 73.5 million shares and 9.2% stake in the company. Morgan Stanley, another investment bank and asset manager holds 67 million shares used in mutual funds like The Vanguard Group. BlackRock Inc. is another investment manager that owns a little over 50 million shares that are used in its exchange-traded funds and other investment vehicles. Lastly, State Street Corp. offers a broad variety of investment management services that may include some of their 36.4 million Twitter shares. All of these groups have big stakes in Twitter and, depending on how the company performs with Musk leading the company, can see big gains or drastic falls in their portfolios (Reiff).
Individualism
The individualist theory states that the goal of a business is to maximize profit for the stakeholders and act in their best interests within the law (Salazar 17). Part of the deal that Elon Musk agreed to when he acquired Twitter was that the company would no longer be a publicly traded company. Rather, it would be private. Because of this, there is no financial information available to the public at this time to see how Twitter is doing financially since Musk has taken over. However, prior to going private, Elon Musk was the second largest stakeholder in the company. Therefore, it would make sense that he acts in an individualist way to maximize his own wealth as well as the wealth of other stakeholders. In the deal to acquire Twitter, Musk made sure that the company would no longer be a publicly traded company, reversing the IPO of Twitter. This action makes it very difficult to tell how the company is doing with regard to its stock price and equity value, but we can infer based on other information that the company is not doing well since Elon Musk has taken over. Immediately cutting half of the employees at the company is a dangerous move. While it may mean Twitter is cutting down on costs, it doesn’t mean it can sustain its revenues. In fact, Twitter has lost many of its main revenue sources (advertisers) due to Musk’s comments regarding Twitter and his political stance (Thorbecke). They have either canceled their deals with Twitter or have them on hold to try and preserve their company’s public image. These actions go against individualism and likely hurt the wealth of the stakeholders dramatically.
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| Chevrolet, Jeep, Chipotle Mexican Grill, and Ford were the first major companies to halt their advertisements on Twitter. |
Utilitarianism
The utilitarianism theory states that an action is deemed ethical if it promotes happiness to the maximum number of people possible and yourself as well as minimize suffering. Pleasure and happiness should be brought to all beings that can feel it and it should be done impartially (Salazar 19-20). It has been clear with the actions of Elon Musk that he has not acted in line with the utilitarianism theory. Within 24 hours of acquiring Twitter, Musk discussed the layoff of nearly half the company. Specifically, Musk wanted to do this prior to November 1st so he wouldn’t have to pay bonuses set to be paid on that date. When told this would cause an uproar and employee lawsuits, Musk said he was used to going to court and paying penalties (Conger). This action and statement are almost the antitheses of utilitarianism. Layoffs of that size are unnecessary within the first 24 hours of running a company. Furthermore, trying to do it specifically before a certain date so people don’t get the bonus, they worked for isn’t promoting happiness to the maximum number of people possible. If anything, it’s only promoting happiness to himself, and therefore is not ethical by Mill’s standards.
Another example of how Musk hasn’t followed utilitarianism is by giving employees an ultimatum: work 12-hour days at a high pace or leave (Conger). This doesn’t bring happiness to the employees at Twitter because for most people that’s a difficult decision. Many can’t afford to work 12-hour days or don’t want to consistently at a high pace. Working these hours means sacrificing nearly everything in life besides work, and many don’t want that. However, some also can’t afford to be jobless. Some have to support a family and if they don’t have a job, they cannot put food on the table for their children. This, therefore, shows that Musk is once again not being ethical by the standards set in utilitarianism.
Kantianism
Kantianism focuses on four main points, all of which revolve around rationality, respect, and motivation to do the right thing. This ethical theory also talks about how it is wrong to manipulate and exploit people for your own advantage (Salazar 21-22). Musk hasn’t thought that way since his buyout of Twitter. His actions to cut half of the employees at Twitter does not, at least from an external point of view, seem to be rational and make sense as the right thing to do. That doesn’t mean that a layoff of some kind wasn’t necessary, but half of the employees was irrational and disrespectful to both the people getting laid off and also the employees who are still with Twitter because they have to pick up the work that their former coworkers were doing.
Furthermore, there are reports of Musk using Twitter as his somewhat own personal platform to push his own agenda. He has recently been talking a lot about free speech on Twitter but in a radically right-wing way. In one tweet as recently as Monday night, Musk stated,” This is a battle for the future of civilization. If free speech is lost even in America, tyranny is all that lies ahead,” as well as “The Twitter Files on free speech suppression soon to be published on Twitter itself. The public deserves to know what really happened …” (Musk). Everyone is allowed to voice their own political opinion, but Musk doing so in such a public manner is irrational. It has cost him many sources of revenue for Twitter and is not the right way to try and handle the situation. He may believe he is motivated to do the right thing for the people of the United States, but he is not just an individual on the platform. He is the leader of the company, and he needs to be motivated to do what’s right for the company.
Musk has further sent the country into a frenzy by reactivating the accounts of several individuals that were banned from the app, including Donald Trump. Trump was banned from the app nearly two years ago after inciting the attack on the Capitol on January 6th, 2021 through Twitter. With Trump as well as others granted access to the app again, Musk and Twitter are facing heavy pressure and the repercussions, including more advertisers leaving Twitter and others protesting the use of the app.
Photos from the January 6th riots at the Capitol (left) and the 45th president of the United States Donald Trump (right).
Kant also states that the formula of humanity is to act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means. Elon Musk also doesn't appear to follow this formula as he does look more at a company and its employees as entities rather than human beings, especially with massive layoffs early on as well as aggressive deadlines. He looks to push employees to the limit to get the most out of them like they're machines. Some argue that to be an effective CEO you can't let emotion sway you, but there is a balance that can be had between both.
Virtue Theory
There are four main virtues developed by Aristotle in the virtue theory. They include courage, honesty, temperance, and justice (Salazar 23). In this ethical dilemma, Elon Musk seems to be acting with a lot of courage. He isn’t afraid of what others think of his decisions, but this courage seen early on now looks to be rashness, as the company talked about trying to hire back employees they laid off (Conger).
In Elon Musk’s short time with Twitter, he has had times where he has been somewhat secretive and dishonest. When first hired he had a meeting in the war room with human resources executives to discuss immediate layoffs. When he finally went through with it, all his did was send an email and lock access to their company emails and message board (Thorbecke). Furthermore, Musk taking the company private makes it difficult to see how they’re doing and further keeps people in the dark about the status of the company. However, he has been quite open about his plans to give free speech on Twitter as well as publicly voicing his political opinion.
Being a businessman, Musk will push his employees to get the most out of them. Because of this, he does not have great temperance with his employees. Asking for Twitter Blue to be up and running within a week was a tall task to ask of his employees. Furthermore, asking all employees to begin to work 12-hour days is slightly unreasonable (Conger). However, his desires for the company are for it to be great and that is why he’s putting into place these requests.
Musk isn’t one who cares much for justice. When discussing the layoff of half the employees at Twitter, he wanted to do so prior to their bonus date. He added that he didn’t mind going to court over it rather than paying the bonuses. However, Musk is a hard-working man who tends to ask the employees the same as he asks of himself. Musk also has produced quality products with Tesla and has great ideas for the future.
Justificatied Ethics Evaluation
Overall, I think what Elon Musk has done so far with Twitter is unethical. I understand the need to cut expenses to help increase profits. It’s a common practice in the business world and expenses for Twitter primarily come from paying employees. Layoffs happen to some companies, but I don’t think it was necessary to cut half the staff. I think laying off 25% of the staff to start would’ve been better and then reassessing more layoffs if necessary. Furthermore, trying to do it prior to their bonus date and initially not caring about going to court over it is very unethical in my opinion. Those people worked hard for their money and deserve it.
On top of that, Musk has asked the remaining employees to work long hours. This is definitely something worth debating the ethicality of, but I don’t see too much wrong with it so long as it’s not a long-term change. Many people work multiple jobs and have other tasks to complete daily, and I feel that it’s more common today for people to work more than a typical 9-5. Musk also does give an alternative to those who don’t want to work under those circumstances. He offers all who decide to leave a three-month severance package. Leaving is difficult, but I feel like someone who once worked for Twitter can find employment elsewhere relatively quickly, so I don’t see this ultimatum as unethical.
Lastly, when talking about how Musk has handled voicing his own political opinion and its impact on Twitter, I don’t think it was unethical, but I do think there was a better, more professional way to go about it. Using media outlets to voice your opinion is okay, and using a social media platform you just acquired makes sense, especially since it has drawn attention and buzz to the app. But his actions and statements have caused many to not want to be associated with Twitter because he is now the owner. This has caused a huge loss of profits for the company, and this is the main issue because it’s a trickle-down effect. Loss of revenues may mean more people out of jobs and if that’s the case then Elon Musk is at fault for that. If he wanted to voice his opinion, he should’ve done so through a more professional outlet and voiced his opinion in a more professional way.
Conclusion
Ethical controversies in the business world have been happening forever and will continue to happen for the rest of time. There will always be situations difficult to navigate these situations and it is up to us to educate ourselves to the best of our ability to make proper decisions. It is interesting to see how many ethical controversies have arisen already for Twitter and Elon Musk in such a short period of time. From layoffs to new products, politics to bankruptcies, Musk and Twitter have dug themselves a hole financially that they must do work to get out of. However, despite all the news and decisions made, broadly speaking Elon Musk is an individualist. He wouldn’t sink $44 billion dollars into a company just to see it die. He will continue to try and make Twitter better than it’s ever been. How he does so may not be perfect in the eyes of all ethical philosophers, but ultimately, he seems to be business oriented and looking to turn a profit for himself and the people around him.
References
Allyn, B. (2022, November 12). Elon Musk says Twitter bankruptcy is possible, but is that likely? NPR. Retrieved November 29, 2022, from https://www.npr.org/2022/11/12/1136205315/musk-twitter-bankruptcy-how-likely
Conger, K., Isaac, M., Mac, R., & Hsu, T. (2022, November 11). Two weeks of chaos: Inside elon musk's takeover of Twitter. The New York Times. Retrieved November 29, 2022, from https://www.nytimes.com/2022/11/11/technology/elon-musk-twitter-takeover.html
Kolondy,Lora. S. P. (2022, November 11). Twitter pauses paid verifications after users abuse service to impersonate brands and people. CNBC. Retrieved November 29, 2022, from https://www.cnbc.com/2022/11/11/twitter-blue-subscription-disappears-from-app.html
Musk, Elon. “This Is a Battle for the Future of Civilization. If Free Speech Is Lost Even in America, Tyranny Is All That Lies Ahead.” Twitter, Twitter, 29 Nov. 2022, https://twitter.com/elonmusk/status/1597404771618430976?cxt=HHwWgICl7aTLj6ssAAAA.
Musk, Elon. “The Twitter Files on Free Speech Suppression Soon to Be Published on Twitter Itself. the Public Deserves to Know What Really Happened ...” Twitter, Twitter, 28 Nov. 2022, https://twitter.com/elonmusk/status/1597336812732575744?cxt=HHwWgMCj2cfX8KosAAAA.
Reiff, N. (2022, November 22). Top 5 twitter shareholders. Investopedia. Retrieved November 29, 2022, from https://www.investopedia.com/articles/insights/060916/top-3-twitter-shareholders-twtr.asp
Salazar, Heather. The Business Ethics Case Manual. n.d.
Thorbecke, C. (2022, November 27). Layoffs, ultimatums, and an ongoing saga over Blue Check Marks: Elon Musk's first month at Twitter | CNN business. CNN. Retrieved November 30, 2022, from https://www.cnn.com/2022/11/27/tech/elon-musk-one-month-twitter/index.html
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