06242017Headline:

Tweet-Tweet, Bye-Bye: Twitter lays off more than 300 employees

By Isadora Linheira

 

On Tuesday, Oct. 13, Twitter announced that the company is laying off up to 366 employees to cut costs. Jack Dorsey, the co-founder of Twitter, who was named chief executive of the social media company last week, opted for the cuts as the first major moves to improve the company.

 
In an email to employees, Mr. Dorsey wrote “We are moving forward with a restructuring of our work force so we can put our company on a stronger path to grow…” Dorsey continued, “We feel strongly that Engineering will move much faster with a smaller team, while remaining the biggest percentage of our work force. And the rest of the organization will be streamlined in parallel.”

 
According to The New York Times, Twitter’s revenue and adjusted profit for the third quarter would be at or above its previous forecasts, the high end of the company’s previous forecast predicted revenue of $560 million and adjusted earnings of $115 million.

 
Before the announcement of the layoffs, Twitter’s share fell nearly seven percent, which closed at $28.75. On the day of the layoff announcement, the shares rose more than five percent.

 
As a considerably “new” company, Twitter’s work force has grown quickly through acquisitions and hiring. In June 30 of this year, Twitter had about 4,100 employees, which shows an increase of more than 800 people from the previous June.

 
However, it’s been a huge struggle for the company to increase its base of active users, due to the fact that many potential customers find the service difficult to use. The principal source of Twitter’s revenue comes from advertisers, who have complained that Twitter’s offers are less compelling, in comparison to those offered by Google and Facebook.

 
According to Twitter, the company would provide “generous” exit packages to the laid-off employees. Twitter is aiming to take a pretax charge between $5 million up to $15 million in the fourth quarter in connection with the recent layoffs.

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