It has already cut nearly three-fourths of its global workforce and has even started selling some of its office fixtures, but Twitter may be taking the next step in its aggressive cost-cutting efforts by looking to avoid a major expense: rent.
The San Francisco tech company is withholding rent and other payments for office space it leases around the world, according to a report from the New York Times. Under new owner Elon Musk, the report said, Twitter hasn't paid rent for any of its offices in the United States or overseas, has stopped payments to vendors, and is even weighing the legal consequences of refusing to pay severance to former employees.
Twitter, which leases about 800,000 square feet for its headquarters at 1355 Market St. in San Francisco, has about 25 offices around the world. The tech company laid off staff across its marketing and media relations department after Musk's takeover in late October. Twitter did not immediately respond to CoStar News' requests to comment.
Shorenstein Properties, the landlord of Twitter's Market Street headquarters building alongside JPMorgan since 2011, also did not immediately respond to requests to comment.
Since finalizing his $44 billion purchase of the social media platform, Musk has wasted no time in slashing every possible expense in an effort to help the company reach profitability. The company has thrown out popular perks and benefits, slashed travel budgets and is even trying to auction off office fixtures including designer furniture and commercial kitchen equipment.
Now, with a dwindling set of options as to what else can be cut, Twitter's reported refusal to pay its rent could be an attempt to force landlords to renegotiate lease and rate terms. The company has already received complaints from real estate investment and management firms, including Shorenstein and The Crown Estate, its landlord in London.
At the time of the sale to Musk, Twitter leased space at about 15 offices across the United States, according to CoStar data. Its largest hub is in San Francisco, but others include Boulder, Colorado; New York City; Seattle; and Oakland, California, the space for which it has been trying to sublease for more than six months. Twitter renewed the lease for its San Francisco headquarters last year, extending its deal with Shorenstein for space at the property through April 2028.