These are not logical decisions. It is about the power, not the logic [1] [2] [3]. You can't fight power with logic, only with more power (just as Musk had no choice but to complete the Twitter deal when the Delaware Court of Chancery wasn't going to let him walk away because of the poor deal he negotiated; he certainly tried though, as covered in excruciating detail by Bloomberg's Matt Levine).
High level, you're never going to be able to negotiate with folks at this level; they got there because of, very broadly speaking, the "dark triad" personality [4]. Therefore, you're only left with "higher authority" to keep them in check, such as government, law, etc.
The cost of office space for Twitter is negligible compared to their other costs. 1500 employees could fit in a handful of low-rise office buildings.
In any case, Musk can be pro-RTO for the same reason numerous other CEOs are: they have significant sums invested in commercial real estate, and don't want prices to enter a downward spiral.
Not when you have leases that are 5 or 10 years for 7500 or 8000 employees, which is what they had before musk took over.
Commercial offices and real estate in big cities is fucking expensive. Like $100/year per square foot for nice office space at the peak. Each employee probably requires a minimum of 100sqft average to account for offices, conference rooms, etc. 10k x 1000 = 10m/year per 1k employees.
Figure like 1m or 2m a month per 1000 employees after you factor in all the other maintenance and required stuff for an office that size.
I would be surprised if they are not sitting anywhere from 70-100m/year of real estate costs.
Maybe 30-60m/year if they didn’t build out office space for their employees hired during the pandemic or got fantastic lease terms (which if they did, they would probably be subletting at a profit).
If you want to break your lease, in this commercial real estate market, guess what? Tough shit. You can pay the lease in its entirety or sublet the space.
$100m/yr for office costs are high, assuming these bills are actually being paid everywhere. They've been evicted from their Colorado office and have been sued for not paying rent at a SF office,[0]
Either way, it pales in comparison to the $300m/qtr they're on the hook for for interest payments to banks that financed $13bn of the deal.
OK, but having millions in accounts payable is not the same as actually having it flow out of the company and hit your operating cash reserves.
That's what happening with their loan payments, at a significantly higher scale than vendors they simply haven't paid, and are hoping to shake down for better terms.
That’s such an oversimplification. Apart from the lease, there’s insurance, staffing and maintenance at the very least. Security, infrastructure, equipment, utilities, and then the insurance and maintenance cost of that. The list is pretty long and it costs quite a bit. That’s why open office is so popular among higher ups. You can fit more people in the same building.
