Elon Musk takeover costs Twitter €12.7m in Irish redundancy costs

The Irish operation of Elon Musk’s social media giant, X, formerly Twitter, has incurred redundancy costs of €12.7 million at its Dublin base since his acquisition of the business last year.

Twitter established its European headquarters in Ireland in 2011 and, according to accounts just filed by Twitter International Unlimited Company, the company “has taken significant steps to reduce its cost base and improve its financial performance, including workforce reduction and discontinuing the use of office space that is no longer required” since Mr Musk’s takeover.

“These actions are expected to lower the company’s expenses going forward,” they say.

[ Redundancy: How much will I get – and what should I do with it? ]

A note attached to the accounts says that, alongside the redundancy costs of €12.7 million, the company discontinued using office space on January 26th this year. It says this may be deemed to be an onerous contract with a value of €9.2 million at that date.

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It says following acquisition and restructuring, there may be a material impairment of the firm’s intellectual property and in investment in subsidiaries though a detailed forecast at company level has not yet been prepared.

Mr Musk acquired Twitter’s global business on October 28th, 2022, in a deal worth $44 billion (€42.6 billion). Within weeks, Twitter confirmed that 140 employees at the Dublin base were being made redundant.

Those to depart included Sinéad McSweeney, one of Twitter’s top executives in Ireland. She settled with the group last December after previously securing a temporary High Court injunction stopping the social media giant from terminating her employment. The details of the settlement were not disclosed to the High Court.

At the end of 2021, headcount at the Dublin operation had increased by 82 to 325, the accounts said, comprising 127 people in sales and marketing, 174 in general and administrative and 24 in research and development (R &D).

Wages and salaries of €34.03 million along with share-based compensation of €9.49 million brought staff costs to €43.5 million in that year – or an average of €133,926 per employee.

The pay package for directors in 2021 totalled €1.67 million, including “emoluments” of €613,000 and a €1.06 million gain on the exercise of restricted stock units.

None of the directors who served during 2021 remain in place today. The three directors now in charge were appointed in February and April of this year.

The accounts – signed off on May 23rd – show that pretax losses at Twitter International UC increased by 10.5 per cent to €657.8 million in 2021.

The loss chiefly arose from the firm’s non-cash amortisation costs of intellectual property of €530.2 million for 2021 and came despite a 35 per cent rise in revenue to €1.45 billion.

The directors say in the accounts that the business “had a strong balance sheet” at year end with net assets of €6.99 billion and cash of €43 million.

The directors state that the company is the subject of inquiries by the Data Protection Commission (DPC) here over its compliance with the General Data Protection Regulation (GDPR).

Twitter said that it was not aware of any noncompliance with laws and regulations that would see company subject to a potential fine that would have a material adverse impact on the business.