X’s Revenue in India Plummets by 90%: Unpacking the Decline

Regulatory filings show that X’s revenue in India plummeted nearly 90% in the financial year ending March, dropping from around ₹208 crore ($24.7 million) to just ₹21 crore ($2.51 million). Net profit didn’t fare any better, nosediving from ₹30 crore ($3.62 million) to a mere ₹3 crore ($380,000).

Elon Musk’s acquisition of Twitter in October 2022 for a staggering $44 billion was a turning point for the company. One of his first major moves was a global restructuring that included mass layoffs. In India, this meant that nearly the entire workforce, over 200 employees, was let go. Employee benefit expenses in the country were slashed by 95%, from ₹130 crore to ₹6 crore.

While cost-cutting might improve short-term profitability, it had unintended consequences. The dismissal of the ad sales team severely impacted relationships with advertisers, who contribute the bulk of X’s revenue in India.

Ad revenues took a hit without a dedicated sales team to maintain and build advertiser relationships. Global brands began pulling back from the platform, partly due to disputes with Musk and concerns over the platform’s direction. Sajal Gupta, a digital advertising expert, pointed out that the absence of an active sales force led to a nosedive in ad revenues, directly impacting profitability.

“This reflects the broader challenges X Corp has faced globally,” Gupta noted. “Implementing new strategies while managing the fallout from internal restructuring is no small feat.”

The situation in India mirrors a global trend for X. The company has even filed lawsuits against significant advertisers like Unilever and Mars for boycotting the platform. According to Kantar research, 26% of marketers plan to reduce ad spending on X in 2025, the largest pullback from any major global ad platform.

Brand safety concerns are at the forefront. Many companies are wary of associating with a platform that has become increasingly controversial. This sentiment is amplified in India, leading local brands to distance themselves from advertising on X.

What’s Next for X in India?

Despite the revenue freefall, X’s India unit remained profitable, albeit with significantly reduced earnings. This was primarily due to the drastic cuts in expenses, including the layoffs. However, relying solely on cost-cutting is not sustainable in the long run.

Rebuilding trust with advertisers is crucial. Without them, the platform risks further revenue declines in India and globally. It’s a challenging road ahead, but with strategic planning and a focus on advertiser relationships, there’s potential for recovery.

Leadership decisions have far-reaching impacts. Aggressive restructuring and strained advertiser relationships have put the company in a precarious position. Reengaging with advertisers and addressing brand safety concerns should be top priorities for a platform that once viewed India as its third-largest market.

In the fast-paced world of tech, adaptability is vital. Whether X can navigate these challenges will be a story worth following in the coming months.

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