Twitter has announced it will be laying off 9 percent of its staff (roughly 350 people), as the company tries to cut costs and refocus its operations. The news was rumored earlier this week, and confirmed this morning along with the company's financial earnings for Q3 2016. The cuts come mostly in the ad sales division.
While Twitter managed to beat analysts' expectations, earning $616 million in revenue compared to the forecasted $590-610 million, revenue growth has slowed and the company is still losing money. It also reported only a small uptick in its user base: 317 million monthly active users in Q3, up three percent year over year; with the US accounting for 67 million of those users, up 1 percent year over year.
The company repeatedly hammered the theme that it wants to become profitable in 2017, with the newly announced job cuts helping in that goal. According to a report from Recode the cuts will be "heavily focused" on the company's marketing and sales team. CEO Jack Dorsey will address the lay offs in an all-hands meeting later this afternoon, with the cuts following 300 earlier job losses in October 2015, not long after Dorsey resumed the position of CEO.
Twitter has failed to make itself attractive to potential buyers
Slimming down its internal costs may help make Twitter a more attractive proposition for buyers. Over the past months a number of companies including Salesforce and Disney have reportedly explored the option of buying Twitter, but ultimately no bids were made. This is partly due to the company's high price tag (estimated at around $20 billion), but also because of its reputation as a haven for trolls and abuse.
This problem was also addressed in Twitter's Q3 letter to shareholders. "For the past few months our team has been working hard to build the most important safety features and updating our safety policies," said the company. "Next month, we will be sharing meaningful updates to our safety policy, our product, and enforcement strategy." These are familiar promises though, and Twitter will need to deliver more than just good intentions if it wants to help its users.
The main emphasis during today's earnings call was the success of the company's live video efforts around major events like NFL games and presidential debates. These events not only drew a big audience, but helped to convert casual Twitter readers to logged in users. Watch for Twitter to find more media partners with tentpole programming that it can push into its feed.