Having released its earnings report for the third quarter of 2016, Twitter has now confirmed that it will be laying off 9 percent of its workforce, or around 350 employees.
This is a slightly greater proportion than Bloomberg originally reported, as Twitter was expected to lay off around 8 percent of its employee base. This follows a similar move it made last year when current CEO Jack Dorsey took over the reins.
During the earnings conference call, Dorsey revealed that most the employees leaving the company would come from the sales, marketing, and partnership departments. The CEO noted that the company would be moving from “three sales channels, to two.”
Moreover, Twitter announced that it saw a net loss of $103 million in the last quarter, though it actually finished ahead of estimates with quarterly revenue of $616 million, representing an 8 percent year-on-year increase. It also boasts 317 million monthly active users, up 3 percent from last year.
— TwitterIR (@TwitterIR) October 24, 2016
As recently as this month, analysts were predicting that job losses could be on the cards for Twitter, with estimates ranging from hundreds to thousands of staff cuts. Noting the company’s operating losses (which amounted to more than $500 million last year), Bronte Capital hedge fund manager John Hempton previously said the company’s CEO should be fired, and cutbacks made to save on expenses. The overwhelming majority of that loss was due to its staff equity grants, which came in at around $682 million in 2015.
The added scrutiny reflects the importance of the upcoming report. It’s been a tough year for Twitter and Dorsey. Following two previous quarters of sluggish user growth, the company’s board made the decision to evaluate formal takeover bids, scheduled for the same day as its quarterly report. At first, a number of suitors were rumored to be mulling the idea of making an offer (with Google, Salesforce, and Disney thought to be the most likely candidates to make a bid). In an embarrassing turn of events, however, the previous few weeks have seen all three firms officially back away from the process, leaving Twitter out in the cold. Meanwhile, the company’s stock continued to plummet, losing 40 percent of its value over the past 12 months.
It remains to be seen whether Twitter’s gambits on live video and changes to its core product will be enough to return the company to profitability. At this stage, nothing short of a miraculous turnaround will impress investors.
Updated on 10-27-2016 by Lulu Chang: Added news that Twitter will be laying off 9 percent of its workforce.
- Twitter finally banned hate speech against religious groups. Will it help?
- Twitter will now label, hide tweets when Trump, other politicians break its rules
- Here’s why Twitter went down for an hour earlier on Thursday
- Uber lost $1 billion in just three months — and Wall Street is thrilled
- Twitter’s latest effort to tackle abusive content focuses on Direct Messages