Elon Musk takeover led to Twitter losing half its advertising revenue

Since its acquisition by Elon Musk for $44 billion in October of last year, Twitter has witnessed a significant decline in its advertising revenue, with a loss of nearly half its earnings, as revealed by the platform's owner.

He acknowledged that the company did not experience the anticipated increase in sales during June but expressed a more optimistic outlook for July, stating that the month appeared "a bit more promising".

Upon assuming control in 2022, Musk initiated cost-cutting measures by terminating approximately half of Twitter's 7,500-strong workforce.

Meanwhile, rival app Threads has reportedly garnered 150 million users, according to estimates, with its integration to Instagram granting the Meta-designed platform access to a potential two billion users.

Twitter is grappling with a substantial debt burden. Musk disclosed over the weekend that cash flow remains negative; however, he did not specify a timeframe for the 50 per cent decline in ad revenue.

In a tweet, he stated, "Need to reach positive cash flow before we have the luxury of anything else."

Despite significant staff layoffs and reductions in cloud service expenses, Twitter's revenue forecast for 2023 stands at $3 billion (£2.29 billion), a decrease from $5.1 billion in 2021, according to Musk.

This recent development underscores the fact that aggressive cost-cutting measures have not succeeded in luring back advertisers who departed following alterations to the platform's content moderation rules.

This is in spite of a statement made by the former CEO during an April interview with the BBC, where he indicated that most advertisers had returned to the site. Earlier this month, Twitter implemented restrictions on the number of tweets users could access, as part of its efforts to promote Twitter Blue, its paid subscription service.

Linda Yaccarino, formerly head of advertising at NBCUniversal, assumed the role of chief executive in June, highlighting that advertising sales remain a top priority for Twitter.