Twitter to cut jobs as revenue growth slows

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Twitter is cutting 9% of its workforce – about 350 jobs – after reporting a sharp slowdown in revenue growth.

In the three months to September, revenues rose 8% to $616m. That was better than forecast, but lower than the 20% rise in the previous quarter.

The number of average monthly active users rose 3% to 317 million.

Last month, Twitter hired bankers ahead of a possible sale, but bids from potential suitors such as Google and Salesforce failed to materialise.

Shares in Twitter fell 7% earlier this month after Salesforce – considered to be the most likely bidder – said it had walked away from talks.

Jack Dorsey, chief executive, said he saw a “significant opportunity to increase growth” as the company improved the platform.

Live video

“We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth,” he said.

“The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”

Twitter’s user base remains less than a fifth of Facebook’s and is also fewer than Instagram, the picture app that Facebook owns.

The company hopes that live video will attract more users and recently struck a high-profile deal to show National Football League games in the US on Thursday nights.

The site will also introduce “meaningful updates” next month in a bid to better protect users from abusive content – an issue that Twitter has been widely criticised about

Profit goal

Twitter remained heavily in the red in the quarter with a $102.8m net loss, down from a $131.7m loss in the same period last year.

Chief financial officer Anthony Noto said Twitter aimed to become profitable in 2017: “We intend to fully invest in our highest priorities and are de-prioritising certain initiatives and simplifying how we operate in other areas.”

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However, Wedbush analyst Michael Pachter said Twitter needed to increase revenue by between $200m and $300m a quarter to become profitable next year.

“The building blocks for revenue are increasing the number of users – and Twitter is not doing a particularly good job of that,” he said.

Advertising revenue rose 6% to $545m in the quarter, while data licensing and other revenue jumped 26% to $71m.

International revenue soared by more than a fifth to $242m, growing more than in the US, where revenue was largely flat at $374m compared with the same period last year,

Twitter shares, which have fallen by a quarter this year, rose 1.3% to $17.52 in New York.

The company had 3,860 employees as of June.

Twitter to cut jobs as revenue growth slows

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