Twitter, Its Share Price Dropping, Plans To Cut Up To 8 Percent Of Workforce
After just a week back on the job, Twitter CEO Jack Dorsey is making his presence felt in a big way, announcing plans to cut up to 8 percent of the workforce at the money-losing messaging company.
The cuts, some 336 of them, were approved by Twitter's board on Monday, as part of what the company calls "an overall plan to organize around the company's top product priorities and drive efficiencies."
In corporate speak, that means: "We need to get our act together before too many more investors lose patience with us."
The Wall Street Journal reported that the cuts were "a long time coming. For years there had been internal debates about the need to pare hiring at Twitter as bloated staff levels slowed progress."
In other words, Twitter has a growth problem: It has some 316 million active monthly users but hasn't yet taken off with the broader audience of Internet users.
Under former CEO Dick Costolo, the company invested heavily in new hires and data centers, and its workforce grew to about 4,100. But Twitter remains something of a niche product, especially compared with other social-networking sites such as Facebook.
Meanwhile, the company keeps losing money — more than $136 million in the second quarter of this year alone. And investors have noticed, driving Twitter's shares down nearly 20 percent in three months.
In July, Costolo resigned. The board made Dorsey, the company's co-founder, interim CEO, a job that became permanent last week.
In a letter to employees announcing the layoffs, Dorsey wrote that he wanted Twitter's engineering department to have a "smaller and nimbler team" and said "the rest of the organization will be streamlined in parallel."
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