Social media company Twitter’s stock immediately rose 4 percent after releasing better than expected earnings for the third quarter. In addition to Twitter’s better than expected earnings, this company announced that it will layoff 9 percent of their total workforce.
Twitter earned $616 million in revenue in the third quarter. Analysts were expecting a revenue around $606 million. Also, this company adjusted 13 cents per share, which was four cents higher than analysts’ predictions.
This social media company has had trouble getting new monthly active users to join their site in recent years. This quarter the social media company added a decent 4 million monthly active users, which gives Twitter a total community of around 317 million active users. The company also said that their daily user growth was accelerating by 7 percent in the most recent quarter.
Earlier in the week, Twitter executives said they would laying off 8 percent of their workforce. Apparently that number rose by 1 percent since that date. This 9 percent layoff translates to 350 Twitter employees. Executives hope these layoffs will streamline certain areas of Twitter’s business so they can operate more efficiently in the future.
Twitter said that this layoff was a part of a larger restructuring project. The Twitter team wants to make more partnerships and reorganize their marketing and sales teams. They also hope this restructuring will help them reach GAAP profitability by next year.
Twitter CEO Jack Dorsey told reporters he believes this quarter’s great numbers are attributable to the company’s focus on enhancing Twitter’s new feed, improving the response to harassment issues, and offering more live and streaming videos via Periscope.
Twitter’s stock (ticker TWTR) is currently hovering around $17.50.
The earnings release for giant social media platform, Twitter Inc. will be on Thursday, this week. To be precise, the time for the release of the report will be 4.00 a.m. PST. According to the company, the timing for the report has largely been influenced by analysts who said that other tech companies have slated their releases on the same day. They include Google, Amazon and Atlassian.
Break From Tradition
According to techcrunch.com, the early morning time has, however, not gone down well with some analysts who accuse the company of breaking from tradition. This is because most tech companies are used to reporting an hour or so after mid-day at the end of day trading. Analysts have been accustomed to that time and Twitter’s time is a little uncomfortable for some of them.
Job Cuts Announcement
There is high anticipation of the company’s earnings reports for several reasons. However, the main one is driven by speculation that the company may announce around 300 job cuts. According to unnamed insiders, the job cut announcement may come even before the release of the earnings report.
Last year, Twitter cut the same number of jobs it’s expected to cut this week. If it happens, the move will be widely considered as an attempt to relieve some of the financial pressures from the company’s recent losses and the fall of its share price for the last one year. There were expectations of the company’s acquisition but the companies that were expected to bid abandoned the process.
Struggling social media giant Twitter is reportedly planning a new round of layoffs as earnings continue to sag and the company struggles to adjust. The expected cutbacks,first reported by Bloomberg, come as the tech company’s attempts to find a buyer appear to have fizzled.
Twitter’s share price has fallen by 40 percent in the last year, user growth has stagnated, and the company has gone through a series of leadership and staff shakeups. Jack Dorsey, Twitter’s co-founder, returned to the company as chief executive in October 2015 and immediately initiated an 8 percent reduction in force.
Despite that cutback, the company has failed to turn around its fortunes. Recent reports at several publications indicate deep unease within Twitter at Dorsey’s leadership, especially his joint roles as chief executive of Twitter and Square, an online payment firm he founded. Several senior figures at Twitter have been poached by Alphabet, the parent company of Google, and Facebook, Twitter’s arch-rival.
Dorsey has been trying to offload Twitter to another firm that could tolerate more losses as the company seeks user growth. Despite hiring bankers to shop the company to potential buyers, Twitter was unable to convince executives at Salesforce and The Walt Disney Co. to seal a deal.
Bloomberg’s report indicates that Dorsey is planning another 8 percent cut to Twitter’s workforce, which would mean up to 300 employees would lose their jobs. A smaller headcount would help Twitter more easily pay its most talented engineers with stock-based compensation, something its declining share price has made increasingly difficult.
A full announcement on Twitter’s job cut plans is expected on Thursday, the same day the company reports its third-quarter earnings to investors.