Twitter gets sued over non-payment of office space rent

Due to failure to pay rent on its San Francisco office, the landlord of the building sued Twitter in a state court. As per the complaint filed on December 29, the social media company reportedly did not pay $136,260 in rent to Columbia Reit - 650 California LLC, the landlord of the Hartford Building, of which the company occupies the 30th floor. Twitter signed a seven-year lease for the office space in 2017. Columbia Reit had alerted the company on December 16 that it would default on its rent if the payment is not completed in the next five days. 

As per a December 29 New York Times report, Twitter boss Elon Musk had asked his subordinates to renegotiate the rent agreements or end them for its several offices. The Seattle branch had allegedly faced eviction after it stopped paying the rent. 

Beyond issues related to office rent, Twitter has been employing severe cost-cutting exercises. For example, the Janitorial services in the offices were suspended, and employees resorted to bringing their own toilet paper. In December, Twitter shut down one of its three computer storage facilities despite concerns regarding the site’s performance. Shortly after, on December 28, Twitter users around the world reported service interruptions. 

Musk bought Twitter in October for $44 billion. The deal was partly financed with approximately $13 billion of debt with interest repayments of about $1.5 billion a year. Soon after taking on the role of ‘chief twit’, Musk introduced several cost-cutting measures, including heavy layoffs across departments.

During a Twitter Space on December 21, Musk said that the site was on course to hit $3 billion negative cash flow before the severe cost-cutting round. “That is why I spent the last five weeks cutting costs like crazy,” he said. Musk further added that Twitter will be ‘okay next year’, and that the company is expected to roughly hit cash flow break-even.