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Twitter lays off hundreds but quarterly results better than expected

The company’s quarterly results report dropped at 4am local time in California with news of 9% cuts in workforce but better-than-expected revenue of $616m

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Twitter’s CEO, Jack Dorsey, said: ‘The restructuring, which focuses primarily on reorganizing our sales, partnerships and marketing efforts, is intended to create greater efficiency.’ Photograph: Richard Drew/AP

Twitter has announced hundreds of layoffs rumored to be coming at the social media company for days.

But the company’s quarterly results report revealed its revenue was a better-than-expected $616m and its earnings per share were ahead of analyst estimates, $0.13 to $0.09. The company’s most important metric, its number of monthly active users, was also up: to 317 million from 313 million the previous quarter. Of those users, 83% were on mobile devices.

Twitter stock, down by more than 25% this year, rose slightly in pre-market trading.

Twitter typically announces quarterly results after the market has closed in New York, though the company is headquartered on the west coast; on Monday, the firm rescheduled its earnings call to 4am California time on Thursday.

https://interactive.guim.co.uk/charts/embed/oct/2016-10-27T10:58:12/embed.html

“This morning we announced a restructuring and reduction in force affecting approximately 9% of Twitter’s positions globally,” wrote CEO Jack Dorsey in his letter to shareholders. “The restructuring, which focuses primarily on reorganizing our sales, partnerships and marketing efforts, is intended to create greater efficiency.” Given Twitter’s headcount of about 3,900, the cuts would affect around 351 people. The job cuts are slightly heavier than expected: 9% instead of a reported 8%.

Chief financial officer Anthony Noto said layoffs would affect the company’s ad salespeople, and that “salesforce transitions can have unexpected effects”.

Dorsey said the company was also “taking important steps to make Twitter safer for everyone”, promising updates in the coming weeks.

Politics increases Twitter’s user engagement, he said, but not noticeably more than other popular topics of debate.

“In the third quarter we did benefit during the days of the [US presidential] debates in the conversations we had around the debates,” Dorsey said. “[But] we really need to have a ‘debate’ every day on Twitter to improve the metrics on a quarterly basis. And that’s where we’re headed.”

https://interactive.guim.co.uk/charts/embed/oct/2016-10-27T12:20:16/embed.html

The company was less than forthcoming on the topic of future revenues, and also declined to provide the third quarter’s daily active user numbers for analysts.

Twitter is ripe for acquisition, with a share price well below its initial public offering, but none of the company’s suitors have closed the deal. Among the rumored acquirers were tech giant Microsoft, Japanese telecoms firm Softbank, cloud computing company Salesforce and Google parent Alphabet. Even Disney has reportedly expressed interest.

Dorsey told shareholders he was “focused on maximizing shareholder value” at the beginning of the call with analysts following the release of the results report. “I don’t plan to comment any further on this topic,” he said.

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This entry was posted on October 27, 2016 by .

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