Report: Twitter to Shed Hundreds of Jobs
November 2, 2016
Apparently as part of plans to guarantee profitability, social media company Twitter Inc is believed to be considering further dismissal of hundreds of its employees as early as this week, according to a report by Bloomberg.
Citing people familiar with the matter, the business news website reports that the social network may announce job cuts that would affect about 300 employees, representing roughly 8 percent of its work force. That will be the same percentage as the number of positions cut last year when co-founder Jack Dorsey returned as the company’s chief executive.
A source said the job cuts, the total of which is still likely to change, may be announced before Twitter releases its earnings result for the third quarter on Thursday.
The social networking website is trying to cut down on spending as it experiences a slowdown in sales growth.
It has struggled greatly to grow its user base, even losing ground to newer rivals such as Instagram. This contributed to the disappearance of all the leading suitors that were thought to be interested after it announced that it was up for a takeover.
Alphabet Inc, the parent company of Google, and Walt Disney were among the top companies that were believed to have been interested in Twitter at some point, although they eventually announced that they would not be making an offer.
The last-standing major contender Salesforce.com was forced to withdraw from the race after its shareholders expressed disapproval of a takeover deal for the social network.
There was also speculation recently that Softbank may be considering buying Twitter, but there is no substantial evidence yet as regards that.
Dorsey has come under increasing scrutiny for having failed so far to turn around the fortune of the money-losing Twitter since taking over as the chief executive. The fact that he combines the CEO job of the social network and that of mobile payment firm Square has also called to question his ability to devote sufficient attention to the affairs of the former.
The Twitter chief executive has already completed one round of employee shedding, but this has not reversed the losing trend facing the company. He has not been able to grow the number of the social network’s users.
Twitter shares have shed more than 40 percent in the past 12 months, down from a 52-week high. Among the consequences of this is that the company has not found it easy attracting investors and paying its employees.
The fall in stock value, combined with constant losses, has made it hard for the microblogging site to pay its engineers with shares. This makes it somewhat disadvantaged when it comes to competing for talent with more formidable rivals such as Facebook and Google.
It is believed the proposed job cuts would help lessen the woes of the social media network, which has yet to confirm them.
Twitter on Monday rescheduled the release of its third-quarter results before the opening of market on Thursday, a move some considered rather unusual for a West Coast tech company. It had initially planned to release the report after the close of market on the day.