Twitter Sued As It Stops Paying Rent On Office Space

A landlord in San Francisco has sued Twitter over failing to pay rent on its headquarters in the city, amidst a cost-cutting drive that has included mass layoffs and even the reported termination of janitorial services.

The owner of Twitter’s San Francisco headquarters, Columbia Reit – 650 California LLC, said in the complaint that it notified Twitter on 16 December that it would be in default on its lease for the 30th floor of the Hartford Building in five days unless the rent was paid.

The tenant failed to pay the $136,250 (£113,000) in rent for the office space, Columbia Reit said.

The New York Times reported on 13 December that Twitter hadn’t paid rent on the San Francisco office, or any of its other global offices, in several weeks. Twitter has also been sued for failing to pay for two charter flights

Data centre shutdown

On Christmas Eve Twitter owner Elon Musk ordered staff to shut down one of the company’s three main data centres, this one located in Sacramento, the New York Times said in a separate report late last week.

Musk terminated janitorial services at the San Francisco headquarters earlier in December after staff went on strike for better wages, leading some staff to bring their own toilet paper to work.

Twitter has also reportedly terminated cleaning services at its New York office and indicated it may close one of its two offices there.

Musk’s takeover of the company for $44bn in late October has left the firm saddled with debt that will require $1bn in annual interest payments.

‘Negative cash flow’

Speaking to a live forum in December he said the company faced a “negative cash flow situation” of about $3bn in 2023, due to sluggish advertising and increase costs.

Since early November Musk has tried to save about $500m in nonlabour costs, according to internal documents viewed by the NYT, and has laid off or fired nearly 75 percent of its staff.

Musk has also hired some people to replace those who were laid off, but training for new staff has reportedly been cut from three days to 90 minutes.