Flipping the Bird: Elon vs Twitter | Chief Twit | 3

Summary

Business Wars Podcast Summary: "Flipping the Bird: Elon vs Twitter | Chief Twit | Episode 3"

Introduction to Sun Valley Conference Release Date: July 11, 2025

The episode of Business Wars hosted by David Brown delves into the high-stakes battle between Elon Musk and Twitter, unfolding against the backdrop of the exclusive Sun Valley Conference in Idaho. Sun Valley, a serene mountain town, transforms annually into a gathering ground for the world's elite, including industry leaders, billionaires, and influential executives. This year, the spotlight was on the power dynamics surrounding Twitter's potential acquisition by Elon Musk.

Sun Valley: A Hub for Power Plays At [00:53], reporter Ed Ludlow describes Sun Valley as a "kind of like Davos, but more secret," highlighting the conference's exclusivity and the presence of the world's most influential figures. The event serves as a playground for moguls to network, negotiate multi-billion dollar deals, and engage in recreational activities like fishing and golf. Notably, the keynote speaker for the 2022 conference was expected to be Elon Musk, who was on the brink of finalizing his acquisition of Twitter.

Elon Musk's Absence and Rising Tensions Elon Musk's unexpected absence on the first two days of the conference ([02:39]) sparked rumors and anxiety among attendees. As the conference progressed, Musk finally made his low-profile entrance on Thursday evening ([03:08]), only to cause a stir with his outspoken criticism of Twitter's user authenticity and data transparency during his Friday interview. Musk questioned Twitter's claim that "95% of users were authentic" ([05:16]), putting Twitter's executives under intense scrutiny.

SEC Filing and Termination of the Twitter Deal On Friday, a significant development occurred when an SEC filing revealed that Elon Musk was terminating his agreement to buy Twitter, citing alleged misrepresentation of user data and breach of contractual obligations by Twitter ([03:56]). This move intensified the already tense atmosphere at Sun Valley, leading Twitter's executives to remain composed despite Musk's public accusations.

Pretrial Hearing and Legal Maneuvers Following the termination of the deal, Twitter filed a lawsuit against Musk for breach of contract. The pretrial hearing in the Delaware Chancery Court was unprecedented in its intensity and audience interest ([08:13]). Twitter's legal team accused Musk of undermining the deal through public uncertainty, which allegedly harmed Twitter's stock value. In contrast, Musk sought to delay the trial to gather more time to prepare his case, hoping that prolonged uncertainty might eventually allow him to walk away from the deal.

Discovery and the Exposure of Private Communications The legal battle reached a pivotal moment when Twitter's legal team introduced Exhibit H, a 33-page compilation of Musk's private text messages with his associates discussing the Twitter deal ([11:56]). These messages revealed behind-the-scenes negotiations and offered unprecedented insight into the decision-making processes of Silicon Valley's elite. The leak of these texts led to a significant drop in Tesla's stock, adding financial pressure on Musk and weakening his position in the lawsuit.

Elon Musk's Reversal and Attempt to Salvage the Deal Facing mounting legal and financial pressures, Elon Musk proposed to buy Twitter at the original offer price of $54.20 per share ([13:57]). The judge set the trial start date for October 17th and permitted Musk a brief extension to finalize the deal by October 28th ([14:14]). This abrupt reversal marked the end of the protracted legal showdown, positioning Musk as the new owner of Twitter.

Elon Musk Takes Control of Twitter The acquisition closed amidst Twitter's annual Halloween party, signaling the official start of Musk's leadership. Employees were greeted by Musk’s symbolic entrance carrying a white porcelain sink, a gesture captured on video to symbolize his takeover ([17:00]). Musk updated his Twitter bio to "Chief Twit," immediately signaling his hands-on approach to managing the platform.

Initial Actions and Employee Reactions Upon taking control, Musk swiftly ousted Twitter's executive team, including CEO Parag Agrawal, CFO Ned Siegel, and General Counsel Shawn Edgett, terminating their contracts to avoid hefty golden parachute payments ([24:01]). This drastic move led to immediate anxiety and uncertainty among Twitter's 7,500 employees, many of whom faced potential layoffs.

Chaos and Power Struggles at Twitter Headquarters The transition period was marked by confusion and fear as Musk introduced his own team of advisors, colloquially known as "goons," into Twitter’s operations ([31:23]). These advisors demanded that engineers print out their code, a nonsensical request that further embittered the workforce and undermined trust in leadership ([31:23]). The company's paperless environment and strong emphasis on sustainability only exacerbated the frustration, leading to increased paranoia and speculation among employees about their job security and the future of Twitter.

Employee Resistance and Technical Uncertainty Amidst these upheavals, employees like Sasha Solomon and Zoe Schiffer attempted to navigate the chaotic environment by creating secret Slack channels and seeking clarity on the impending layoffs. However, missteps in channel privacy settings and the pervasive control exerted by Musk’s advisors contributed to a growing sense of helplessness and dread ([34:15]).

Conclusion: The Beginning of a New Era for Twitter As the episode concludes, Twitter's infrastructure teetered on the brink of instability due to mass layoffs and the abrupt leadership changes instigated by Elon Musk. The site faced potential operational disruptions, and the workforce grappled with the reality of working under a new, unpredictable regime. The episode sets the stage for the ensuing turmoil within Twitter, highlighting the profound impact of Musk’s acquisition on the company’s culture, operations, and future.

Notable Quotes:

• Ed Ludlow ([00:57]): "It's like billionaires mountain retreat and it's a who's who of company executives, wealthy elite, the world's richest people…"
• Zoe Schiffer ([17:30]): "I thought things were kind of going well, and I was like, oh, my God, maybe this will work."
• Sasha Solomon ([17:50]): "When he walked in with that sink, it was… pretty apt nevertheless."
• Ed Ludlow ([31:23]): "You know, anyone that works in software essentially, or is a software engineer will tell you that by many, that was considered a completely meaningless metric by which to judge layoffs in particular."

Key Takeaways:

• The Sun Valley Conference served as the stage for the dramatic showdown between Elon Musk and Twitter's leadership.
• Musk’s public criticisms and legal maneuvers intensified the conflict, ultimately leading to his acquisition of Twitter.
• Musk’s takeover was marked by immediate and drastic changes, including the ousting of key executives and the introduction of a new, authoritative team.
• The transition has created a climate of fear and uncertainty among Twitter employees, with potential ramifications for the platform's functionality and corporate culture.

This episode of Business Wars provides an in-depth look at the tumultuous acquisition of Twitter by Elon Musk, highlighting the complex interplay of legal battles, personal dynamics, and corporate strategy that shaped this pivotal moment in social media history.

Transcript

[David Brown]

This is Business War's Flipping the Bird Episodes will drop Wednesday, Thursday and Friday. For the next two weeks, Wondery subscribers can binge the entire season of Business Flipping the Bird right now. Start your free trial in the Wondery app or on Apple Podcasts. Wondery for most of the year, Sun Valley is a quiet mountain town in Idaho with a population of about 1800 people, a picturesque slice of earth nestled in the Sawtooth National Forest. But every summer, for one week in early July, the moguls aren't just on the ski slopes.

[Ed Ludlow]

Sun Valley is an annual conference run by a boutique investment bank called Allen.

[David Brown]

& Co. Reporter Ed Ludlow has covered the event before for Bloomberg.

[Ed Ludlow]

The way I'd describe it is like it's kind of like Davos, but more secret.

[David Brown]

Once a year, whether the locals want it or not, the leaders of industry arrive by private jet to live out their fantasies of being Ernest Hemingway and leave with a new fishing story and the occasional multi billion dollar deal.

[Ed Ludlow]

It's like billionaires mountain retreat and it's a who's who of company executives, wealthy elite, the world's richest people, influential bankers, interesting people startup found.

[David Brown]

With the exception of Mark Zuckerberg's Friday night karaoke party, a Sun Valley favorite turned Covid casualty, The event in 2022 was very much back to pre pandemic form.

[Ed Ludlow]

There are just a constant stream of Alan & Co. Hired escorts who just ferry the world's most influential and richest between the main lodge where they have breakfasts and lunches and meet in the hallways and other sporting activities like people go and play golf.

[David Brown]

On the guest list this year were three of Twitter's most senior people, Twitter board chair Brett Taylor, CEO Parag Agrawal, and CFO Ned Siegel. Parag arrived the day before the conference began by private jet, of course. Like everyone else at Sun Valley, Parag checked in and got his name tagged. Even Rupert Murdoch wears a name tag. As Parag settled in, everyone was already buzzing about the headliner in July of.

[Ed Ludlow]

2022 at some valley, Elon Musk is the main event.

[David Brown]

Elon Musk, now just a few months away from becoming Twitter's new owner, was set to deliver the marquee address. But as the conference got underway, Elon Musk wasn't there. He missed the first day of the conference and the second. His absence meant that all the questions about the recently announced Twitter deal were thrown at the Twitter execs.

[Ed Ludlow]

We saw Parag Agrawal walking around, Ned Siegel walking around as well, and we called out to both of them to ask about what was going on with Twitter and if there was a risk that the deal would fall through. And, you know, neither of them walking alone answered any questions.

[David Brown]

On Thursday evening, the Elon finally landed. Security ushered him in through a back door. It was as low profile an entrance as he could make. But it didn't take long for him to make a huge ruckus. On Friday, as Sun Valley's VIPs were likely debating what to do about a looming recession, phone alerts started buzzing all around the res. There was a new SEC filing regarding the Twitter sale.

[Ed Ludlow]

The regulatory filing states that Elon Musk is terminating his agreement by Twitter. He literally, while he's at Sun Valley, somebody on his behalf, one assumes, has filed a regulatory filing stating that he wants to end the agreement by Twitter.

[David Brown]

Elon wanted out of the deal, and.

[Ed Ludlow]

In it he alleges that the company has misrepresented user data. And he also says that Twitter has breached its contractual obligations to provide more information to him.

[David Brown]

Things were suddenly very tense in Sun Valley. Conference watchers were on high alert for any potential awkward run in between Elon and Parag or Brett. When Elon took the stage the next day, the room was packed.

[Ed Ludlow]

He's interviewed by Sam Altman, the CEO of OpenAI, and he gets questions from Sam and from the audience about Twitter, and he declines to talk about the status of the deal.

[David Brown]

But Elon was quite willing to drag Twitter.

[Ed Ludlow]

The pervasiveness of bots, the treatment of former President Donald Trump. He talks about how Twitter's user data is shared.

[David Brown]

At one point, he asked the audience if they believed Twitter's claim that 95% of users were authentic. Heads immediately turned to see how the Twitter execs in the audience might respond. The scene may have been humiliating, Elon publicly dragging them. But Brett Taylor, Parag Agrawal and Ned Siegel sat there in the audience, completely poker faced. They had a plan. In fact, it appears they didn't speak to Elon at all. They were done with PR spats and public games. They had an airtight purchase agreement with Elon. Nothing he was saying on stage changed that basic fact. It was time to hold Elon Musk accountable for the deal he had signed. And once all the CEOs and billionaires had left their summer camp in Sun Valley, the Twitter board got to work by suing Elon Musk. This message is brought to you by Apple Card. Each Apple product, like the iPhone 16, is thoughtfully designed by skilled designers. The titanium Apple Card is no different. It's laser etched, has no numbers and it earns you daily cash on everything you buy, including 3% back on everything at Apple. Apply for Apple Card on your iPhone in minutes subject to credit approval. Apple Card is issued by Goldman Sachs Bank USA Salt Lake City branch terms and [e-mail] you have five new messages. Hey Carl, it's Jen from Finance.

[Jen]

Could you submit your expenses this week? Hey Carl, happy Friday. It's Jen, Finance. Just need those receipts today. Me again Carl. Really need those receipts like last week. Please just tell me where they are. Are you by your desk right now?

[David Brown]

Finance teams, you shouldn't be chasing down Carl or anyone else with ramp. Expenses are sent with a and reminders happen automatically. Switch your business to ramp.com today and love finance again from Wondery I'm David Brown, the host of Business wars, and this is Flipping the Elon versus Twitter. This is episode three, Chief Twit. I must confess I've made a mess of what should be a small success. But I digress. At least I've tried my very best, I guess. Put me on a pedestal and I'll only disappoint you. Don't be unexceptional. I promise to exploit you. A week after Twitter sued Elon for breach of contract, their lawyers met in court for the first time. Well, they met in court virtually.

[Lauren Hirsch]

It was, I'm sure, like the most hotly listened to pretrial hearing the Delaware Chancery Court has ever had.

[David Brown]

New York Times reporter Lauren Hirsch was among the throng of reporters in Wall street, types who called in to listen to the hearing. There were so many of them that they jammed the court phone system. These kinds of hearings rarely draw this much attention. But Elon versus Twitter promised high drama.

[Lauren Hirsch]

There has been so much noise and so many tweets by the end of the day, this is a trial that will largely simply rest on legal arguments. So you had both sides get up there and make their initial case.

[David Brown]

This hearing would determine the start date of the trial, and the date itself had major implications for both sides. Elon wanted to buy time. His legal team insisted it needed at least six months to prepare its case. They pushed for a February 2023 court date.

[Lauren Hirsch]

So it seemed his strategy was to delay trial as much as he can and make kind of document search as sweeping as he wanted. And if you delay trial for long enough, then you might actually eventually give Musk the right to walk away if the company deteriorates so much that he can say, well, this isn't the company I agreed to buy. Now I can walk away. So Twitter's main objective from day one was to get to trial as quick as they could and keep it focused on the legal arguments that they really thought were on its side.

[David Brown]

Twitter's lawyers accused Elon of trying to sabotage the deal, arguing that every time he stoked uncertainty, he hurt the value of the company. Twitter stock had been on a bumpy ride since Elon made his offer. With each derogatory tweet and threat to the deal, sending the stock on yet another dip, they entered into evidence one exchange that had made headlines. In mid May, CEO Parag Agrawal tweeted a long thread that explained how Twitter analyzes the number of spam accounts, claiming it was less than 5% of all accounts and that Elon couldn't possibly determine the number of spam accounts on Twitter without having access to internal company data, which he didn't. Parag's thread was detailed and technical, showing his computer engineering roots. Elon responded with a poop emoji. Now Twitter was demanding Elon close the deal on the originally agreed upon date for the originally agreed upon price. The judge agreed with Twitter that every passing day risked harming the company. She set the trial start date for October 17th.

[Lauren Hirsch]

You look to the judge for clues as to how she is responding to your arguments, and that gives him an indication of whose side she's basically on. And she basically kept giving Twitter wins in court.

[David Brown]

Over the next two months, Elon kept trying to stall. He filed motion after motion, demanding more and more data from Twitter, subpoenaing his good buddy Jack Dorsey, and even trying to use information from a questionable Twitter whistleblower to derail the deal. He asked for another delay of trial, but the judge said no. It was early September, and the approaching October trial must have started to feel like looking down the barrel of a gun, especially when Musk's lawyers were forced to reveal one particularly interesting bit of discovery. Exhibit H.

[Lauren Hirsch]

That filing, with all of the text, was like the juiciest, most fun legal filing I think I have ever read.

[David Brown]

It was 33 pages of text messages about the Twitter deal between Elon and his rich and powerful friends and associates. Remember billionaire Larry Ellison casually offering up a billion dollars and angel investor Jason Calacanis offering up his proverbial sword. It was all there and then some.

[Lauren Hirsch]

It's this insight into how deals are done, how people talk to each other in the Valley, how so much of what deal making that you think is about money and financials. Well, it is about money, but it's also about ego and relationships.

[David Brown]

The dynamic was less sound investment principles and due diligence and more like a teen movie.

[Lauren Hirsch]

Yes, it was total high school vibes. Like, the big man on campus was throwing a cool party on Friday night and everyone was trying to figure out how to get the invite. Like, some people are offering him beer, some people are trying to like show off that they have the cool date.

[David Brown]

The press had a field day with these text messages. And Tesla's stock, which was the main source of Elon's wealth, plummeted 5% that day. It fell the next day, too. Public humiliation for Elon was one thing. A tanking Tesla stock and deteriorating legal situation was a different story altogether. Three days after Elon's private text messages were made public, the judge demanded Elon turn over even more documents. Maybe the public perception that Elon would lose this trial finally got to him. The next day, Elon changed course again.

[Ed Ludlow]

According to Bloomberg sources, he's u turned now. He wants to propose to buy Twitter at that original offer price and has informed Twitter of his intention to do so.

[David Brown]

He would do what the board was asking. Buy Twitter at the original offer price of $54.20 per share. The judge allowed him a few extra days to close the deal, giving Elon until October 28th. It had been one of the strangest on again, off again, on again courtships in modern business history. For so long, the question had been whether or not Elon would actually buy Twitter. Now came the question. Once it was his, what would he do with it? Elon had always been an erratic CEO at his other companies, but employees, the media and investors had often overlooked his unusual or even abusive behavior, largely because of the incredible size of his vision.

[Ed Ludlow]

Tesla, the clear market cumber in the world of electric vehicles that continues to grow and set records for production and is working on advancing autonomous driving. And many would say and argue that it's a clear leader and the rest of the industry is struggling to catch up.

[David Brown]

Ed Ludlow has reported on Elon's companies for years.

[Ed Ludlow]

SpaceX dominates commercial launch of payload to orbit. It's like two thirds of everything that goes into space. And that's pretty incredible to say when you take into account all of the public and private sector, not just here in the U.S. but in Europe, China.

[David Brown]

Elon started a project called Hyperloop, dedicated to hurdling humans in milliseconds through tubes from city to city. Did he have a grand vision like that for an Elon run Twitter, One that could inspire his employees, users and investors? Elon had already made Plenty of bold statements about what he'd do with Twitter once it was his overhaul. Content, moderation, make Twitter's code open source for anyone to see, verify every user, and get rid of bots. But those goals and the way he'd behaved throughout the deal had eroded most of the trust he might have had with Twitter employees. They weren't waiting for a visionary to come and save them. They were bracing for an invader. Because what was most worrying of all to Twitter's employees was Elon's plan for layoffs. While Twitter was likely to face layoffs even without Elon, he had told his investors he might lay off as much as 75% of the 7,500 person workforce as a way to get the long suffering finances of the company closer to profitability. But could Twitter even function with those kinds of cuts? On October 26, employees at Twitter's HQ in San Francisco were surprised when their new boss arrived, largely unannounced for the first time, carrying a large white porcelain sink.

[Sasha Solomon]

When he walked in with that sink, it was. I mean, that was the signal that there was no going back. We were in for it whether we liked it or not.

[David Brown]

Elon was all smiles and let out a few chuckles as he lumbered across the lobby, sink in hand. The entire performance was caught on video, which Elon was quick to post. Entering Twitter HQ let that sink in. He also updated his Twitter bio to Chief Twit.

[Sasha Solomon]

That let that sink in moment really was pretty. It was a terrible joke, but it was pretty apt nevertheless.

[David Brown]

The deal was not officially done, but it was clearly the beginning of the Elon Musk era.

[Zoe Schiffer]

Musk visited the SF office. A lot of people didn't either know he was going to be there or, like, weren't expecting him to be there.

[David Brown]

Software engineer and manager Sasha Solomon was working remotely from Portland, Oregon that day. But several members of her team were at HQ and they were curious.

[Zoe Schiffer]

And so they were like, we're going to try to find Elon Musk and like, talk to him. I was like, put in a good word for GraphQL GraphQL.

[David Brown]

That was what Sasha's team worked on. It was a computing language the company used to send data between different parts of the site. They had no idea if Elon knew what it was, let alone if he would value it. Elon was there to learn, finally how Twitter actually worked. He went from meeting to meeting with engineers and project leads to take a peek under the hood of the thing he was about to pay $44 billion for. But he Wasn't alone. He also brought along his two year old son X, and his biographer, Walter Isaacson. Tweeps, who'd spent the better part of the last six months riding the roller coaster of will he or won't he? And what the hell will it mean for us if he does? Were a bit awestruck to see him in person, wandering around their halls, grabbing a coffee at Twitter's own coffee shop called the Perch, a hyper modern cafe with black ceilings, surrealist murals, and inspirational quotes splashed on the walls.

[Zoe Schiffer]

And he was, like, getting a coffee. And they walked right up to him.

[David Brown]

That's where Sasha's team found Elon.

[Zoe Schiffer]

They got, like, pictures with him. They, like, shook his hand. They told him about what we worked on, and then they, like, you know, slacked us later. And we're like, we talked to Elon Musk. We shook his hand. They said that they, like, talked to him about GraphQL and they're like, I think he thought it was cool. And I was like, great, okay, maybe our team won't be cut.

[David Brown]

More and more employees met Elon and shared their impressions of him. Some said he wasn't a jerk. Some said he almost seemed cool.

[Zoe Schiffer]

I thought things were kind of going well, and I was like, oh, my God, maybe this will work. Like, maybe if he can run the company, things are gonna be okay. And, like, the next day, everything just went to hell.

[David Brown]

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[Jen]

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[Lauren Hirsch]

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[Jen]

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[David Brown]

The day Elon's purchase of Twitter officially closed was the day of Twitter's annual Halloween party at HQ, aptly called Trick or Tweet. Employees were encouraged to bring their kids and make it a family affair.

[Sasha Solomon]

The kids came in pretty common kid costumes. You had them dressed up as different cartoon characters. You had some kids dressed as witches or ghosts.

[David Brown]

Software engineer Jim Redmond saw the festivities when he stepped away from his desk for a snack. The two story cafeteria had been decked out with carved pumpkins and fake spider webs. Kids were digging into bowls of candy.

[Sasha Solomon]

There were people dressed as pilots and flight attendants, zombies, vampires or things. So everything was very festive, very Halloweeny.

[David Brown]

But the fleet of Teslas parked outside was the flashing neon message that something else was going on.

[Jen]

People realized like the deal was going to close and it was probably going to close in the next 24 hours and that would mean a ton of people were going to lose their jobs.

[David Brown]

Zoe Schiffer is a reporter for the fledgling tech blog site called Platformer, which became a leading source of breaking news in the Elon Twitter saga. Sources inside Twitter were sending Zoe photos of the Halloween party.

[Jen]

There's a performer who's dressed like a scarecrow, and at first employees are saying, I think that's Elon Musk. And then, you know, quickly realize that, no, it's just like a scarecrow performer.

[David Brown]

The mood in the building was palpably different than the day before. There was a growing paranoia in the air that had nothing to do with Halloween.

[Jen]

It has this kind of last day of camp vibe where everyone's like, we're not sure if we're going to see each other again or like, what this company is going to even be like.

[David Brown]

Jim had just grabbed a snack and walked past the Halloween scene to rejoin his team in what they referred to as the cave, a dark room with no windows. This was where they focused on maintaining the integrity of the site. Then he noticed something on Slack.

[Sasha Solomon]

We started to hear rumors that the deal had closed. At this point, our sources were other employees. We didn't have any external confirmation, but the sources were plausible and we were getting it from lots of different places. So it seemed pretty reasonable to assume that this had happened.

[David Brown]

Soon one of Zoe's sources messaged her the rumors were true.

[Jen]

So she'd been at a party with her kids, trying to put on a brave face, and eventually she gives up and she's like, you know what? I'm going home. This is nuts. And on her way out the door, she passes the head of product, and he's looking super somber, just like not good news has not come his way in a minute. And as she passes him, he just kind of shakes his head and says, it's done. The deal's done. And she knows that Elon Musk now owns the company.

[David Brown]

Twitter was Elon's, and he was wasting no time getting to work on his agenda. Employees heard that CEO Parag Agrawal was out. Head of Legal policy Vijay Gaddy, Chief Finance Officer Ned Siegel out. General counsel Shawn Edgett was escorted out of the building by security guards moments after he finished the paperwork on the deal. The key players of the C suite were all gone. And they weren't just let go. Parag, Vidhya and Ned were fired for cause, meaning the millions of dollars they were owed as golden parachutes that had been baked into the deal. Elon was trying to avoid paying them. Basically a huge middle finger to the people who had just sued him. A few employees from the party huddled in the bathrooms, sobbing. Anxiety hit epic levels, and a sort of mourning started to settle in for the Twitter they'd all known and loved. Sitting at home in South Carolina. Nyah. A sales rep at Twitter couldn't take her eyes off her phone and computer, waiting for some kind of official word.

[Jen]

And I just remember. Just waiting. And I remember thinking, okay, well, they're working on west coast time. Surely I'm going to hear something tonight. We're going to get an intro email. We're going to get a, hey, guys, I'm Elon. Like, we're going to get something.

[David Brown]

But by the end of the business day in San Francisco, she still hadn't heard anything, nor had thousands of employees spread around the country. Elon instead chose to make the news of the deal official with a tweet. The bird is freed. The tweet was open to interpretation. Surely Elon now felt free to do what he wanted with Twitter. But inside the cage, Twitter's employees felt trapped and anxious, waiting to learn of their own personal fates. Elon had wasted no time. Laying waste to the C suite were the rank and file employees. Next, Bloomberg reporter Ed Ludlow was camped outside of Twitter HQ with his TV crew. The next day.

[Ed Ludlow]

We're outside Twitter hq, which is on the corner of Market Intent. There May be like two or three live television crews. There was always some photographers hanging about. A very committed press pack. There's two entrances, right? There's kind of a front entrance to the building and a side entrance. And so you'd have people, like, split their time between the two and try and get some sense of what was going on. It's kind of a lull. We've been there for hours. And so we're walking around the outside of the building. The kind of. The entire press pack is gathered on the 10th street side of the building.

[David Brown]

Ed stood around in a trim navy blue suit, his head hung down as he texted on his phone. The other reporters, none of whom were wearing anything close to a suit, kept a gaze down an alleyway, which led to Twitter.

[Ed Ludlow]

Then these two men, these two guys come out carrying boxes, like, literally cardboard boxes. There's kind of like a mini media scrum where all of the journalists there surround them and start asking questions.

[David Brown]

Ed asked the first question.

[Ed Ludlow]

Which team are you in?

[David Brown]

I was on engineering.

[Ed Ludlow]

Do you know how many?

[David Brown]

I don't know. I know.

[Ed Ludlow]

Nobody knows any. How did they tell you?

[David Brown]

My director was.

[Ed Ludlow]

I'm really sorry, by the way. I realized.

[David Brown]

A CNBC reporter on the ground tweeted out that they are visibly shaken. It seemed like the forced exodus of Twitter had begun. I went on Tesla, man. Right? Yeah, me too.

[Ed Ludlow]

It'll be your entire team, or just some people are in the zoom meeting.

[David Brown]

And then.

[Ed Ludlow]

And then in the zoom meeting, you can see the other people that are in there.

[David Brown]

As Ed and the reporters continue to ask questions and tweet out the breaking news about layoffs at Twitter, engineer Jim Redmond was at home working remotely. He saw the news coverage and immediately grew suspicious.

[Sasha Solomon]

Number one is that they had boxes. At that point, we did not have assigned desks in the office, so everything that you had brought with you, you would need to take with you. At the end of the day, the.

[David Brown]

Guys told reporters their names were Rahul Ligma and Dan Johnson. Jim pulled up Birdhouse, Twitter's internal directory.

[Sasha Solomon]

There's no one by that name here.

[David Brown]

It was just a prank. The two men had seen the media waiting outside of Twitter's HQ that morning and decided to trick them. Elon thought it was hilarious and tweeted, one of the best trolls ever. The stunt went viral, but the over 7,000 employees had no idea if and when the actual layoffs would become real. There was still no official communication from Elon or the company.

[Sasha Solomon]

We just had to kind of speculate.

[David Brown]

And go on rumor in Portland, Oregon, Sasha was trying to figure out what was happening at hq. She searched the bird house too, hoping to keep track of the changes to the org chart. What Sasha found made her furious. Elon was bringing his favorite Tesla engineers to Twitter.

[Zoe Schiffer]

So these are, like, all the Tesla employees that have kind of been moved over temporarily to, like, assessments our code and our engineering skills.

[David Brown]

That glimmer of goodwill Sasha had started to feel toward Elon days earlier evaporated immediately.

[Zoe Schiffer]

So it was this kind of, like, adversarial vibe. It was pretty clear that that meant that, like, Elon basically didn't trust us to do our jobs and didn't trust that we were, like, good engineers.

[David Brown]

It wasn't just engineers Elon brought with him. He called in his own personal lawyer, Alex Spiro, and the exec friends that ran his other companies to serve as his new de facto posse in C Suite guys like angel investor Jason Calacanis, former Twitter director turned tech investor Sriram Krishnan, and former PayPal COO David Sachs. They set up a war room on an unused floor of Twitter HQ and posted a security detail outside of Elon's office. The tweeps quickly settled on a name for all these inventions, the goons. And soon, Elon's goons, or advisors, began making demands, starting with a message to Twitter's engineers. Print out your code and bring it to us. Twitter engineers like Erich Fraunhofer were dumbstruck.

[Ed Ludlow]

It just didn't make sense to me. It was ludicrous. Why do I have to print my code? I mean, I don't print my code. I think very few people print their code. You know, I can just bring my laptop and we can pop it open and I can show you it.

[David Brown]

Jim was just as confused.

[Sasha Solomon]

The request to print out lines of code was puzzling. I mean, why would you. Why would you waste paper and ink on this?

[Ed Ludlow]

I think when you're asked to print your code, someone just making a request of you, that makes zero sense, you're wondering, like, what's he thinking here?

[David Brown]

What's the goal? The goal was likely to do two things. First, to figure out how the system worked, and then to help cull the herd. Ed Ludlow again.

[Ed Ludlow]

They drew up lists, and they decided of those thousands of people that lost their jobs, who was going to go, based on volume, the amount of code that they had submitted during their time working at Twitter, irrespective of how impactful that that code contribution was or not? You could write 100 lines of code, very dense text, literally dense text, but it may have a very minimal real impact on the functionality of the Twitter social media platform. You could have one engineer that wrote just one single line of brilliant text that has a profound impact on the way that Twitter, the social media platform, operates. You know, anyone that works in software essentially, or is a software engineer will tell you that by many, that was considered a completely meaningless metric by which to judge layoffs in particular.

[David Brown]

There was, of course, another problem with their plan. Most of the company was paperless. This was a modern tech company that prided itself on sustainability. We're talking about a company that grew their own herbs. For the food served in the corporate cafeteria, engineers hunted to find the few available printers in the building. They panicked at the prospect of meeting their new boss without their code in print. And then, boom, a new message popped up on Slack. Stop printing your code. Engineers were told to be prepared instead to show Elon their code on their computer. And for those lucky few who found a working printer, they were instructed to shred their code. The back and forth left a bad taste.

[Sasha Solomon]

In my more paranoid moments, I suspect it was an attempt at a power play. You know, make people dance to your music.

[David Brown]

Jim wasn't the only one growing more and more paranoid.

[Zoe Schiffer]

We were worried that, like, there were goons in the Slack channels kind of trying to, I don't know, tell Elon Musk something, or. It just didn't seem like a safe place to talk about things anymore.

[David Brown]

Sasha set up a secret Slack channel away from the eyes of the goons and so she could talk to her team openly.

[Zoe Schiffer]

It was just kind of mostly just like, us trying to figure out what's going on. Like, oh, I heard this from someone. Or, like, I saw this tweet. Maybe that's what's going on. Or like, Elon tweeted this, and so it was kind of like piecing together, like, what's going on?

[David Brown]

But what Sasha understood about Slack was that as a matter of process, at Jack Dorsey's Twitter, all Slack channels were set to public. So if you wanted privacy, you needed to set them to private. Elon's advisors, well, they did not know that.

[Sasha Solomon]

And so they created a new channel, expecting it to be private. It wasn't private, and everyone could see, yes, they are discussing layoffs. It should have been very obvious that this was a public channel, that you're discussing this thing. It did not reflect well on the people who made the channel.

[David Brown]

What was rumor and dread for tweeps now was more certain.

[Sasha Solomon]

I spent most of that week unable to sleep with a very, very low appetite, just kind of jittery, just waiting for things to happen and knowing that there was nothing I could do about, you know, nothing I could do to make it happen faster or slower or not at all. Nothing I could do to change the outcome.

[David Brown]

Mass layoffs were coming and soon, and with it the fear that a shock to the system like that might cause the entire site to break.

[Sasha Solomon]

We had several places where if people weren't being mindful of things and weren't keeping an eye on the automation, that things would potentially fall apart in a very dramatic fashion.

[Zoe Schiffer]

There's just a bunch of little things that I think over time will just kind of like death by a thousand cuts.

[Jen]

You had entire critical engineering teams that had one to two people. Some of them had no people on them overnight.

[David Brown]

That's on the next episode of Flipping the Bird from Wondery. This is episode three of six of Flipping the Elon versus Twitter. I'm your host David Brown. Austin Rachlis wrote this story. Our producers are Nikka Singh and Dave Schelling. Julia Lowery Henderson and Karen Lowe are our senior producers, reporting by Emily Corwin production assistance by Emily Locke and Mariah Dennis fact checking by Nawal Anjani Consultant is Kurt Wagner, Bloomberg journalist and author of an upcoming book about Twitter and Elon Musk. Sound design by Kyle Randall. Music supervisor is Scott Velasquez. For Frisson Sync, Senior managing producer is Latha Pandya. Managing producer is Olivia Weber. Coordinating producer is Heather Baloga. Executive producers are Jenny Lauer, Beckman, George Lavender, Marshall, Louie and Jen Sargent. For Wondering Movie night, date night, or solo marathon, IMDb is your ultimate entertainment companion. Discover new favorites, rate what you've watched, and never miss an episode with the free IMDb app. Curate your watch list with a tap.

[Sasha Solomon]

Get personalized notifications for your favorite shows.

[David Brown]

And find your next must watch movie or series. From blockbusters to hidden gems, we've got you covered. Download the app now, register for free, and find your next favorite.