Giant online news and social networking service, Twitter, is set to lay off 9% of its staff. The layoffs are expected to impact about 350 employees across sales, partnerships and marketing efforts, according to the company.
The goal of the layoff is to push Twitter toward profitability as an independent company. This is contained in the company’s third-quarter letter to shareholders on Thursday.
Twitter said: “The restructuring allows us to continue to fully fund our highest priorities while eliminating investment in non-core areas and driving greater efficiency.”
According to the CNN, Disney, Google and Salesforce were all said to be interested in bidding for the social network, but ultimately backed off. Only Salesforce admitted as much publicly.
“It wasn’t the right fit for us,” Marc Benioff, CEO of Salesforce, said earlier this month.
On a conference call with analysts after the earnings release, Twitter CEO and co-founder, Jack Dorsey said his only comment on the acquisition rumours is “our board is committed to maximising long-term shareholder value.”
“We’re taking the necessary steps to ensure Twitter is well positioned for long-term growth,” Dorsey added.
In the absence of a takeover in the near term and any significant signs of growth, Twitter must push for a turnaround as an independent company. Its first big step is to improve its bottom line through cuts.
Dorsey took over as Twitter’s permanent CEO a year ago and presided over an earlier round of layoffs that reduced staff by 8%.
He has since focused on growing Twitter through live video streaming and making it easier for users to discover relevant tweets in their news feeds, with limited results.
Twitter’s monthly active user count, easily the company’s most scrutinised number, beat estimates by rising to 317 million in the September quarter from 313 million the previous quarter. But growth remains anaemic compared to newer competitors like Instagram and Snapchat.
The stagnant user growth is all the more stunning when you consider that Twitter’s relevance has arguably never been greater. It is the platform of choice for Republican presidential candidate Donald Trump and is, therefore, a key tool for following the U.S. election.
Twitter posted a net loss for the quarter of $103 million. It also expects to incur as much as $30 million in costs from the layoffs, due to severance payouts and stock-based compensation. The stock was up nearly 5% in pre-market trading Thursday.
