Twitter to slash 9% of global workforce

A banner with the logo of Twitter on the front of the New York Stock Exchange (NYSE) in New York.
A banner with the logo of Twitter on the front of the New York Stock Exchange (NYSE) in New York. PHOTO: AFP

NEW YORK • Twitter said yesterday it would cut 9 per cent of its global workforce to keep costs down as the microblogging service reported quarterly results that beat Wall Street expectations, lifting shares.

Third-quarter revenue growth slowed sharply in the third quarter, but topped analysts' expectations.

Revenue rose about 8 per cent to US$616 million (S$858 million), above the average analyst estimate of US$605.8 million. The company reported a 20 per cent rise in revenue in the previous quarter and 58 per cent last year.

Total advertising revenue of US$545 million grew 6 per cent year over year.

Excluding items, the company earned 13 US cents per share, beating the average estimate of nine cents, according to Thomson Reuters.

"We're getting more disciplined about how we invest in the business, and we set a company goal of driving towards GAAP (Generally Accepted Accounting Principles) profitability in 2017," said chief financial officer Anthony Noto.

Twitter, which has seen user growth stall amid competition from nimbler rivals such as Instagram and Snapchat, said its user base ticked up 3 per cent to 317 million average monthly active users in the quarter.

Analysts on average had expected 316.3 million monthly active users, according to market research firm FactSet StreetAccount.

Twitter hired bankers last month to field acquisition offers, but it has seen a dearth of potential bidders after Salesforce.com, the last of the companies believed to be interested in buying the company, said it was not interested in a purchase.

The apparent lack of interest forced the social media company to consider a route anathema to aspiring tech start-ups: a major restructuring.

Twitter had 3,860 employees globally as of June. The lay-off of about 300 could hurt the company's image in San Francisco, where competition for engineering talent is fierce.

The company, led by co-founder Jack Dorsey, said it expected cash expenditures of US$10 million to US$20 million in the fourth quarter, mostly in severance costs.

The popular but money-losing microblogging service spent aggressively on product development and marketing in recent years, betting it could afford losses as long as it attracted new users.

But that growth stalled this year after it exceeded 300 million active monthly users, less than a fifth of Facebook's users.

The company's net loss narrowed to US$102.9 million, or 15 US cents per share, in the third quarter ended Sept 30, from US$131.7 million, or 20 US cents per share, a year earlier.

Twitter also said it would roll out "meaningful updates" next month affecting how it protects users from abusive content, an issue for which the company has endured growing criticism.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 28, 2016, with the headline 'Twitter to slash 9% of global workforce'. Print Edition | Subscribe