Twitter cuts 9% of workforce, restructures sales and marketing
- Twitter revealed its third-quarter results this morning and confirmed rumors that cutbacks were coming. The company will lay off 9% of its workforce — a little bit higher than the 8% that had been reported earlier in the week. The effort focuses on restructuring the company's marketing, sales, and partnerships initiatives.
- While Twitter saw user growth and higher advertising revenues during the third quarter, the company’s results still fall short of the meteoric growth that social media platforms such as Snapchat are experiencing.
- The possibility of Disney acquiring Twitter was floated again this week, but Twitter did not address acquisition rumors in today’s conference call to discuss the results, according to reports.
Twitter is looking to create greater focus and efficiency so it can reach profitability in 2017, something it hopes the restructuring will help it achieve. As takeover rumors swirl around the struggling company, Twitter needs to signal to investors and any potential suitors that it has a strong plan in place for the future.
The micro-blogging site’s third quarter results suggest it is making some progress toward stabilization, despite posting a loss of $103 million. Overall revenue increased 8% for a total of $616 million while the number of average monthly users grew 3% to 317 million and average daily users increased 7%, accelerating growth from 5% in Q2 and 3% in Q1.
Twitter also continues to attract advertisers who are interested in reaching consumers in real-time. Advertising revenue totaled $545 million, up 6%, with mobile accounting for 90% of the total.
Whether or not the cutbacks coupled with moderate growth will be enough to enhance the company’s fortunes going forward remains to be seen. Twitter’s time may be running out to prove its potential for longevity as Snapchat and Facebook increasingly chase its areas of strength with their own strategies for live streaming video and second-screen engagements.
Rumors of a takeover persist even after several potential suitors appeared and then disappeared just as quickly, with Disney’s now reportedly interested again in acquiring Twitter. This suggests a plan B is in place in case Twitter is unable to right the boat.