Inside Linda Yaccarino’s X all-hands after Elon Musk’s platform sues Media Matters: ‘By all means, put your heads together to bring new revenue into the company’

At a hastily-assembled all-hands meeting on Monday, X Corp CEO Linda Yaccarino urged staff to find new sources of revenue as advertisers paused business with X following a Media Matters report on antisemitic content on the platform formerly known as Twitter. Yaccarino spoke shortly after X sued the media watchdog group on Monday in a defamation lawsuit that claims the report relied on manufactured content and was designed to ruin X. Elon Musk, owner of X , did not attend the meeting.

"Some customers have still paused their investments because of some misleading or manipulated information in an article," Yaccarino said, referring to the Media Matter report. "But the data tells the real story and I want to be extremely clear about our efforts, and talk about the most important thing that we've been doing—and that's the most important thing—about fighting anti semitism and discrimination. There's no place for it anywhere on this platform, anywhere in the world, and we're doing our best to keep fighting it at X."

Media Matters published a report Thursday that said advertisements for brands including Apple, Oracle, and Xfinity had appeared next to content on X that was pro-Nazi and/or pro-Adolf Hitler. The report followed X owner Elon Musk agreeing with a post that accused Jews of hating white people. Afterwards, many major brands paused advertising, including Yaccarino's former employer, NBCUniversal.

Musk, who bought the platform for $44 billion last year and has seen its value plummet to $19 billion, posted on Saturday that "X Corp will be filing a thermonuclear lawsuit against Media Matters and ALL those who colluded in this fraudulent attack on our company." Musk also defended his own rhetoric, calling claims that he's anti-semitic "bogus." X did not respond to Fortune's request for comment.

X made good on Musk's threat on Monday, suing Media Matters in federal court in Texas. X claims Media Matters "knowingly and maliciously manufactured side-by-side images depicting advertisers’ posts on X Corp.’s social media platform beside Neo-Nazi and white-nationalist fringe content and then portrayed these manufactured images as if they were what typical X users experience on the platform." X claims the watchdog group "designed both these images and its resulting media strategy to drive advertisers from the platform and destroy X Corp." X is seeking unspecified monetary damages and demands that Media Matters take down the report.

In a statement, Media Matters said, “This is a frivolous lawsuit meant to bully X’s critics into silence. Media Matters stands behind its reporting and looks forward to winning in court.”

At the staff meeting Monday, one anonymous employee asked Yaccarino what she would consider the best outcome of the lawsuit. Yaccarino responded that it "would be the validation that Media Matters, unfortunately manipulates, in this case, not just advertisers but people in general."

"Sunlight is the best disinfectant. Hopefully this is a disinfectant that surfaces all the great work that all of us are doing at X," she said.

Both Musk and Yaccarino have defended X on the social media platform in the wake of the report. Musk claimed on Saturday that the watchdog group "created an alternate account and curated the posts and advertising appearing on the account's timeline to misinform advertisers about the placement of their posts."

Yaccarino reiterated many of the details in Musk's post on Monday, telling staff that "this was a contrived experience that could be curated—or this situation could be committed—on any platform today."

"No platform is gonna get it right," Yaccarino said. "So they basically gamed the system."

The X chief executive also sought to calm worries about the advertiser exodus, claiming some brands still doing business with X have told her that they believe that X "is vital for the global community" but want Yaccarino to share more data so they can explain their positions to employees and key stakeholders.

"They know that I work hard on their behalf and that I am a truth teller, and I want them to hear it from me—everything that is going on at the company," Yaccarino, who has been in the advertising business for several decades, told staff. "And I tell a lot of people this: I didn't come to the company because I needed the company. I came to the company because I wanted to help lead X and be successful in what we're trying to achieve here."

As big brands have paused ads on X, numerous right-wing media companies and influencers have pledged to advertise on X in order to make up for lost revenue. One anonymous staffer asked what should "we do as employees to be more responsible ... just to help offset anything that we might be seeing from a loss from advertisers?"

Yaccarino responded that staff should "be as fiscally responsible as possible," including only expensing "critical and necessary travel." A source familiar with the matter told Fortune the company had just updated its travel policy to reflect this statement and that some travel might have to be approved by Yaccarino or Musk.

"If you deal with contracts, if you're negotiating with anyone, just know that the pauses cause a more specific discipline and diligence as it relates to any type of spending at the company," Yaccarino said. "And by all means, put your heads together to bring new revenue into the company."

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