Twitter May Kick 300 Employees Out of Its Nest
itter appears close to slashing another 300 jobs, or about 8 percent of its workforce, as it works to recover from a failed round of acquisition talks with several suitors.
The job cuts likely would be in sales, Bloomberg reported Monday, citing unnamed sources. Twitter might be taking steps to make itself look more attractive to investors in preparation for its third-quarter earnings report later this week, which is expected to disappoint once again.
The firm originally had planned to release its report Thursday afternoon, but rescheduled it for earlier in the day at the request of analysts, as several other Internet firms are scheduled to report their quarterly earnings late Thursday.
Twitter’s earnings release now is scheduled for 4 a.m. PT Thursday morning, with a conference call to follow at 5 a.m. PT.
“Twitter was a challenged company before it was put into play by takeover suitors,” said Tim Mulligan, senior analyst at Midia Research.
“Now it is a challenged company that failed to sell itself,” he told the E-Commerce Times.
Unless Twitter comes up with a compelling new road map to attract new users, it will have to cut costs as it looks for new ways to move forward, Mulligan said.
The cuts echo a similar move made last year, when Twitter slashed about 300 jobs in October, following the return of cofounder Jack Dorsey to the helm as chief executive of the firm.
Dorsey has spent the last year trying to find ways to monetize Twitter, by driving up user engagement through the development of live-streaming video tools, simulcasting Thursday Night Football on the site, and giving companies more tools for interacting with customers.
Dorsey issued a memo to employees praising his inner circle and promoting Twitter as the “people’s news network” for delivery of breaking news and information, according to the Bloomberg report.
Dorsey may be onto something if he can figure out a way to monetize those capabilities into actual revenue, suggested Paul Teich, principal analyst at Tirias Research.
“Twitter can become the world’s breaking news feed if it can find a way to detect and aggregate significant tweets as they happen, and also figure out how to monetize that news with the world’s news services,” he told the E-Commerce Times.
Shares of Twitter have plummeted in recent weeks, after three major companies, including Salesforce, Disney and Google backed out of plans to make acquisition offers.
Salesforce, widely considered the most serious of the three companies considering a bid, met with considerable pressure from its own shareholders not to go through with a planned offer after hiring an investment bank to advise on a potential negotiations.
“They were likely betting on an acquisition and now it’s about conservation of cash,” observed Rob Enderle, principal analyst at the Enderle Group.
“Clearly, things aren’t getting any better, and they are simply buying time to figure out a better strategy,” he told the E-Commerce Times.
Twitter shares were down almost 4.3 percent, closing at US$17.26 Tuesday.
Softbank is the lone firm that still has an interest in Twitter, according to reports. Softbank has gone through with a few surprising transactions this year, most notably its $32 billion acquisition of semiconductor maker ARM in July.