Cumberland Place, Dublin, the Irish headquarters of X Leah Farrell

Twitter paid out €12.7 million to redundant Dublin employees since Musk purchase

Musk acquired Twitter last October and within weeks, Twitter confirmed that 140 employees at the Dublin base were being made redundant.

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 Musk’s acquisition last year.

Twitter established its European headquarters in Ireland in 2011 and according to new accounts filed by Twitter International Unlimited Company, the company since Musk’s purchase “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”.

They state that “these actions are expected to lower the company’s expenses going forward”.

A note attached to the accounts states that since the acquisition, the company has incurred redundancy costs of €12.7 million, and on 26 January 2023 the company discontinued using office space that may be deemed to be an onerous contract with a value of €9.2 million at that date.

The note states that following acquisition and restructuring, there may be a material impairment of the firm’s Intellectual Property and in investment in subsidiaries through a detailed forecast at company level has not yet been prepared.

The note states that the impairment indicators comprise a reduction in revenue and Earnings Before Interest Depreciation Tax and Amortisation (EBIDTA).

Musk acquired Twitter’s global business on 28 October 2022 in a deal worth $44 billion (€42.6 billion) and 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, but only after settling with the firm last December after she secured a temporary High Court injunction which stopped the social media giant from terminating her employment.

The details of the settlement were not disclosed to the High Court.
The new accounts show that at the end of December 2021, headcount at the Dublin operation had increased by 82 to 325 made up of 127 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 totalling €43.5 million in staff costs for 2021 works out to an average cost of €133,926 per employee for the year.

The pay-package for directors for 2021 totalled €1.67m made up of 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 and the three directors of the company today were only appointed in February and April of this year.

The new accounts – signed off on 23 May – show that pre-tax losses at Twitter International UC increased by 10.5pc to €657.8 million in 2021.

The company recorded the increase in pre-tax losses despite revenues rising by 35 per cent from €1.07 billion to €1.45 billion.

The loss chiefly arose from the firm’s non-cash amortisation costs of Intellectual Property of €530.2 million for 2021.

The directors state that in 2021 the company was able to grow its revenue year over year but not at a rate sufficient enough to cover the additional costs associated with an Intellectual Property acquisition resulting in a loss for the year.

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

The losses resulted in the company not being subject to corporation tax and instead the firm recorded a corporation tax credit of €5.97 million.

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

However, they add that they are not aware of any non-compliance with laws and regulations such that the company would be subject to a potential fine, penalty or loss that would have a material adverse impact on the company’s financial statements.