Things are looking shaky for the third most popular social network.
Reports of a Twitter buyout quickly ramped up this summer, only to be completely crushed by further claims that all the potential buyers had seemingly backed off. Now, Bloomberg reports that Twitter is poised to cut roughly 300 people from its ranks, or about 8 percent of its total employees.
If that number sounds familiar, it’s approximately the same percentage of downsizing that took place when co-founder Jack Dorsey returned as CEO in 2015.
The report comes just days before Twitter is scheduled to report its earnings for the third quarter of 2016, and if true, is a good indicator that Twitter will likely announce underwhelming user statistics.
Twitter’s inability to grow active users as rapidly as investors would like has become a trend for the company, and its stock price has been hammered by the market since Twitter’s public debut in late 2013. Once trading at nearly $70 per share, TWTR is priced at just over $17 per share as of this writing.
As Bloomberg also notes, paying some of its top talent in part with stock shares has become much harder now that its public price has tapered off. Meanwhile, Facebook ($132/share) and Google ($807/share) have a much easier time with recruitment.
We’ll have to wait and see exactly how the potential layoffs unfold, and what Dorsey has to say about the company’s position during this week’s earnings call.
Update 11:09am CT, Oct. 27: Twitter’s rumored layoffs came true. “This morning we announced a restructuring and reduction in force affecting approximately 9% of Twitter’s positions globally,” Dorsey wrote in a letter to shareholders. That’s roughly 350 people of its 3,900-strong workforce.
While the company’s $616 million in revenue for Q3 exceeded expectations, it wasn’t quite enough for the company’s long-term plans. Dorsey acknowledged a boom in Twitter use surrounding the presidential debates this fall, but said “we really need to have a ‘debate’ every day on Twitter to improve the metrics on a quarterly basis.”
As the company strives for profitability in 2017, stagnating user growth meant trimming costs internally was the best move for the company.
His letter also suggested improved safety features coming to the platform soon, “promising updates in the coming weeks,” according to the Guardian.
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