What Elon Musk does with Twitter is what he did with Tesla and SpaceX

Elon Musk slept in the office. He fired employees and executives at will. And he complained that his company was on the verge of bankruptcy.

That was in 2018 and the company was Tesla, as Mr. Musk’s electric car maker struggled to build its mass-market vehicle, the Model 3.

“It was excruciating,” he told The New York Times at the time. “There were times when I didn’t leave the factory for three or four days — days when I didn’t go out.”

The billionaire’s experience of what he called Tesla’s “manufacturing hell” has become a blueprint for the crisis he created on Twitter, which he bought for $44 billion last month. Over the years, Mr. Musk developed a playbook to guide his companies – including Tesla and the rocket maker SpaceX – through periods of pain, apply shock treatment and alarmism, and push his employees and himself to put aside their family and friends to spend it all . their energies on his mission.

At Twitter, Mr. Musk has used many of those same tactics to turn the social media company upside down in just a few weeks.

As of late last month, the 51-year-old has laid off 50 percent of Twitter’s 7,500 employees and accepted the resignation of 1,200 or more. On Monday, he began another round of layoffs, two people said. He tweeted that he was sleeping at Twitter’s San Francisco offices. And he’s employed mission-driven language, telling Twitter’s employees that the company could go out of business if he couldn’t turn it around. Those who want to work on “Twitter 2.0” must commit in writing to his “hard core” vision, he has said.

David Deak, who worked at Tesla from 2014 to 2016 as a senior engineering manager overseeing a battery materials supply chain, said Mr. Musk “clearly thrives in existential conditions.” He added: “He quasi makes them to kindle the fire among everyone.”

The similarities between Musk’s approach to Twitter and what he did at Tesla and SpaceX are clear, added Tammy Madsen, a management professor at Santa Clara University. But it’s unclear if he’ll find the means to motivate employees at a social media company like he did with employees whose missions were to get people out of gas-powered cars or send people into space.

“At Tesla and SpaceX, the approach has always been high risk, high reward,” said Dr. Madsen. “Twitter has been high risk, but the question is, what’s the reward that comes out of it?”

Mr Musk did not respond to a request for comment.

On Sunday, Mr. Musk met with Twitter’s sales reps, two people with knowledge of the matter said. He then fired employees from the sales department on Monday, they said. At the end of last week, Mr. Musk Robin Wheeler, a top seller, they added. Bloomberg previously reported that there could be more layoffs.

Twitter is also reaching out to some engineers who have quit to ask them to return, the people said. At a meeting with employees on Monday, Mr Musk said the company is not planning any further layoffs, according to a person who was present.

The pattern of claiming that the companies are on the verge of possible bankruptcy can often be found in companies led by Mr. Musk. At Tesla in December 2008, during the nadir of the financial crisis, Mr. Musk closed a $50 million investment round from Daimler, he said, in the “last hour of the last day possibly, otherwise payroll would have increased 2 days later .”

He has said the same about SpaceX, once noting that both SpaceX and Tesla had a greater than 90 percent chance that they “would be worth $0in their early days.

For 2017, Mr. Musk said, SpaceX had to conduct rocket launches once every two weeks or face bankruptcy, recalled a former SpaceX executive, who spoke on condition of anonymity for fear of retaliation. At a company driven by a goal to make life “multi-planetary,” the threat of bankruptcy was a motivating factor, the former executive said.

SpaceX has since successfully launched many rockets into space and landed safely back on Earth. But Mr. Musk has returned to his favorite stick, tweet last year that if a “severe global recession” dried up capital, bankruptcy of the rocket maker was “not impossible”.

“Only the paranoid survive,” he wrote, citing Andy Grove, the former CEO of Intel.

An atmosphere of crisis and self-imposed budget cuts give Musk the cover to make drastic changes and lay off top executives or eliminate large numbers of staff, two former Tesla executives said. It also prepares those who remain to work under extreme conditions to achieve Mr Musk’s desires, they said.

The approach at Twitter, where Mr Musk has laid off thousands of employees, “is typically Elon,” Mr Deak said.

The chaos at the social media company is familiar to people who worked at Tesla as the company struggled to ramp up production of the Model 3, which went on sale in 2017. In May of that year, Mr. Musk sent an email to staff that echoed some of the language he has used with Twitter employees.

“Tesla must be hardcore and demanding,” he wrote. “The passing grade at Tesla is excellence because it has to be.”

In the year that followed, Mr. Musk famously slept on the floor in the conference rooms of a Tesla factory, fired the vice president of engineering and worked 120 hours a week to make up for a delay in Model 3 production. to catch. Members of the Tesla board were concerned about Mr Musk’s workload and his use of Ambien to try to sleep.

Foreshadowing the turmoil on Twitter, Mr. Musk spent part of 2018 on the social media service antagonizing lawmakers and regulators, including the Securities and Exchange Commission. The SEC later sued Mr. Musk for tweeting that he “secured the funding” to take Tesla private, though the billionaire never followed through and settled with the agency. This summer, he spent months and millions of dollars in legal fees trying to back out of his deal to buy Twitter.

Testifying in Delaware last week in a lawsuit over his Tesla pay package, Mr. Musk that his penchant for unilateralism could get him into trouble. “If I make decisions without consulting people,” he said, “those decisions are more likely to be wrong.”

In Delaware, Mr. Musk also compared what he did on Twitter with the Model 3 ramp-up, saying on his way to court that what happened at the social media service was “easier.”

Some of Mr. Musk’s former employees are wondering if his management tactics will ultimately work at Twitter. Tesla and SpaceX were in earlier stages of growth when their boss lashed out his harsh language and told everyone to go all out. But Twitter is a more mature company that has been performing inconsistently for years.

Mr. Musk’s management techniques are “good start-up and growth strategy, but not good for building a stable company,” Mr. Deak said.

Musk’s all-encompassing dedication to a company is often inspiring, but it can also turn toxic, creating a culture of fear and scapegoating, according to three former Tesla and SpaceX executives.

And for Mr. Musk, remaking Twitter is just a part-time job. He remains chief executive of Tesla, which he said he continued to lead in court, and SpaceX, which he said focuses more on rocket design than management.

Mr. Musk also heads the Boring Company, a tunneling start-up, and Neuralink, a brain-computer interface technology company. He has said his long-term goal is to save humanity by developing technology for space travel, or, in his words, by “making life multiplanetary to ensure the long-term survival of consciousness”.

The multitasking has become an issue in a lawsuit brought by Tesla shareholders who objected to the pay package Mr. made Musk the richest person in the world. Last week, under questioning by a lawyer representing shareholders who accused Musk of neglecting his duties at Tesla, the Delaware billionaire said his intense involvement with Twitter was temporary.

“There was an initial burst of activity to reorganize the company,” he said last Wednesday, adding, “I expect to reduce my time at Twitter.”

Mike Isaac reporting contributed.