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Twitter to Cut Jobs as It Aims for a Turnaround Twitter to Cut Jobs as It Aims for a Turnaround
(about 5 hours later)
SAN FRANCISCO — For months, the question facing Twitter has been what its fate will be.SAN FRANCISCO — For months, the question facing Twitter has been what its fate will be.
The company that popularized the 140-character message has been the subject of takeover discussions that soured, with suitors like Salesforce.com turning tail. Some thought a partial intervention from private equity would help buy Twitter time to turn itself around. Twitter has considered layoffs and divestitures of certain businesses in an attempt to refocus and reinvigorate its growth. The company that popularized the 140-character message has been the subject of takeover discussions that soured, with suitors like Salesforce.com turning tail. Some thought a partial intervention from private equity would help buy Twitter time to turn itself around. Twitter has also considered layoffs and divestitures of certain businesses in an attempt to refocus and reinvigorate its growth.
When Twitter reported its third-quarter results on Thursday morning, an answer started to emerge. When Twitter reported its third-quarter results on Thursday, an answer started to emerge.
The company said it planned to cut some 350 jobs, or roughly 9 percent of its global work force, the beginnings of an attempt to restructure the company and become profitable. The earnings also showed budding signs of progress, as user growth and revenue rose more than Wall Street had anticipated. The company said it planned to cut 350 jobs, or roughly 9 percent of its global work force, the beginnings of an attempt to revamp the company and become profitable. The earnings also showed budding signs of progress, as user growth and revenue rose more than Wall Street had anticipated.
Twitter posted revenue of $616 million for the quarter, up 8 percent from a year ago and above Wall Street estimates of $605 million. Its net loss narrowed to $103 million, or 15 cents a share, besting Wall Street’s estimates of 19 cents a share.Twitter posted revenue of $616 million for the quarter, up 8 percent from a year ago and above Wall Street estimates of $605 million. Its net loss narrowed to $103 million, or 15 cents a share, besting Wall Street’s estimates of 19 cents a share.
Twitter’s users grew 3 percent from a year ago, to 317 million, and over the latest quarter, it added four million more users, which was slightly more than analysts had expected. Twitter’s users increased 3 percent from a year ago, to 317 million, and over the latest quarter, it added four million more users, which was slightly more than analysts had expected.
At the same time, Twitter began paring back businesses it no longer viewed as central. The company said it would discontinue the mobile app Vine, the six-second video sharing application that Twitter acquired and introduced in 2013. While Vine gained early traction with young users, the app did not reliably make money.
“We see a significant opportunity to increase growth as we continue to improve the core service,” Jack Dorsey, the chief executive of Twitter, said in a statement. “We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth.”“We see a significant opportunity to increase growth as we continue to improve the core service,” Jack Dorsey, the chief executive of Twitter, said in a statement. “We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth.”
He added, “The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”He added, “The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”
The results, largely positive compared with Twitter’s history of quarterly earnings over the last three years, showed the beginnings of alleviating a declining trajectory for the company. Since the company went public three years ago, it has been haunted by its inability to attract new users, especially when compared with Facebook, the social networking giant that hosts more than 1.7 billion regular visitors each month. The results, largely positive compared with Twitter’s history of quarterly earnings over the last three years, showed the beginnings of alleviating a declining path for the company. Since the company went public three years ago, it has been haunted by its inability to attract new users, especially when compared with Facebook, the social networking giant that hosts more than 1.7 billion regular visitors each month.
Twitter’s small uptick in user growth, though, shows an accelerating curve. Growth of average daily active users, for instance, has accelerated over the last three consecutive quarters to 7 percent in the most recent quarter. The company said the improvement was a result of product changes in signing up users, its user interface, notifications and customers’ tweets. Twitter’s small increase in user growth, though, shows an accelerating curve. Growth of average daily active users, for instance, has accelerated over the last three consecutive quarters to 7 percent in the most recent quarter. The company said the improvement was a result of product changes in signing up users, its user interface, notifications and customers’ tweets.
Wall Street greeted the earnings positively. Shares of Twitter were up roughly 4 percent, at $18 a share, in premarket trading. Wall Street greeted the earnings positively. Shares of Twitter were up roughly 2 percent, at $16.64 a share, in early afternoon trading.
Twitter has undergone a string of executive departures and a revolving door of company leadership. Mr. Dorsey, a Twitter-founder, returned last year to lead the company, but critics are concerned that he is not moving fast enough. Twitter has added 10 million users since his return, and the product has not changed as drastically as some hoped. Twitter has undergone a string of executive departures and a revolving door of company leadership. Mr. Dorsey, a Twitter founder, returned last year to lead the company, but critics are concerned that he is not moving fast enough. Twitter has added 10 million users since his return, and the product has not changed as drastically as some hoped.
Instead, Mr. Dorsey has taken a more methodical approach — one that has received mixed reactions internally — and opted to make small changes to how tweets are composed and consumed. In previous interviews, Mr. Dorsey has said many of these small changes are long overdue and accretive to overall user growth.Instead, Mr. Dorsey has taken a more methodical approach — one that has received mixed reactions internally — and opted to make small changes to how tweets are composed and consumed. In previous interviews, Mr. Dorsey has said many of these small changes are long overdue and accretive to overall user growth.
Other changes, like staff restructuring and job cuts, will most likely ease pressure from investors over time. This round of layoffs — the second since Mr. Dorsey’s return last year — will focus on slimming down the sales and marketing teams across the organization. Robert Peck, an analyst with SunTrust Robinson Humphrey, expects that such companywide layoffs could save the company more than $50 to $100 million annually. Other changes, like staff revamping and job cuts, will most likely ease pressure from investors over time. This round of layoffs — the second since Mr. Dorsey’s return last year — will focus on slimming down the sales and marketing teams across the organization. Robert Peck, an analyst with SunTrust Robinson Humphrey, expects that such companywide layoffs could save the company more than $50 to $100 million annually.
Much of Twitter’s current turnaround strategy is based on attracting new users with live video content, including “Thursday Night Football” games broadcast on Twitter in a deal with the National Football League. Such deals highlight Twitter’s ability to provide news and commentary to millions of people in real time.Much of Twitter’s current turnaround strategy is based on attracting new users with live video content, including “Thursday Night Football” games broadcast on Twitter in a deal with the National Football League. Such deals highlight Twitter’s ability to provide news and commentary to millions of people in real time.
“Our live strategy is showing great progress,” Anthony Noto, Twitter’s chief financial officer, said in a statement. “We’ve received very positive feedback from partners, advertisers and people using the service, and we’re pleased with the strong audience and engagement results.”“Our live strategy is showing great progress,” Anthony Noto, Twitter’s chief financial officer, said in a statement. “We’ve received very positive feedback from partners, advertisers and people using the service, and we’re pleased with the strong audience and engagement results.”
Mr. Noto has largely commandeered the live video effort and negotiated relationships with partners like the N.F.L., where Mr. Noto once worked as chief financial officer.Mr. Noto has largely commandeered the live video effort and negotiated relationships with partners like the N.F.L., where Mr. Noto once worked as chief financial officer.
Those efforts, while still nascent, have shown some signs of progress. Twitter’s N.F.L. viewership has steadily increased each week, according to the social media company, even as viewership on traditional television channels has fallen. Twitter also said it has seen strong demand from marketers who wish to buy advertising during live broadcasts, which also include deals with the N.B.A., Bloomberg and election coverage from BuzzFeed and CBS News.Those efforts, while still nascent, have shown some signs of progress. Twitter’s N.F.L. viewership has steadily increased each week, according to the social media company, even as viewership on traditional television channels has fallen. Twitter also said it has seen strong demand from marketers who wish to buy advertising during live broadcasts, which also include deals with the N.B.A., Bloomberg and election coverage from BuzzFeed and CBS News.