Twitter Says It Will Slash 9% Of Workforce As Q3 Earnings Beat Expectations
Twitter shares are up more than 4.5% in pre-market trading after the struggling social media company said that it will cut employment by 9% — but beat Wall Street’s expectations for Q3 financials.
The number of monthly active users — a closely watched statistic — increased 3.3% vs last year to 317 million. Analysts expected 316 million.
Twitter reported a net loss of $102.9 million, a 21.9% improvement vs the period last year, on revenues of $616 million, up 8%. Analysts anticipated revenues of $605.8 million. Adjusted earnings at 13 cents a share beat projections for 9 cents.
“Our strategy is directly driving growth in audience and engagement, with an acceleration in yearover-year growth for daily active usage, Tweet impressions, and time spent for the second
consecutive quarter,” CEO Jack Dorsey says. “We see a significant opportunity to increase growth as we continue to improve the core service. We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth. The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”
The layoffs will mostly hit Twitter’s sales, partnerships and marketing efforts, the company says. They’re designed to “create greater focus and efficiency” to help it become profitable.
The restructuring will result in as much as $20 million in expenditures, almost all for severance outlays, and possibly $10 million in non-cash expenditures related to stock-based compensation expenses. They should hit the books in Q4.
As a result, the company declined to offer financial guidance for the year-end period.
Investors will be listening carefully to a conference call this morning where Dorsey’s expected to lay out his growth strategy after Twitter tried, and failed, to attract a buyer.
Many fear that Twitter’s symbols and protocols make it unappealing to non-users, which will limit its ability to grow.
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