In its third quarter earnings release, Twitter, Inc. (TWTR) announced plans to lay off 9 percent of its at least 3,860-person workforce—around 350 people. In October 2015, the social media website also cut 9 percent of the staff under newly appointed chief executive Jack Dorsey.
The San Francisco-based company, which posted third-quarter losses of $103 million, or 15 cents per share compared with a loss of $131.7 million, or 20 cents a share, in the same period a year ago, hopes to streamline its sales and marketing arms over the next quarter, though it’s not clear how costly the restructuring could be for the company.
“As part of the restructuring, we will move from three sales channels to two,” Dorsey said in its quarterly letter to shareholders. “The transition of accounts will take place over the course of the fourth quarter and, as a result, could have an impact on our revenue performance.”
But, in addition to affecting the social media firm’s ad revenue, the layoffs will mean some hefty expenses as well, according to the shareholder letter, which projected up to $30 million cash and non-cash expenditures—mostly in the form of compensation and severance—as a result of the reorganization.
The recent layoffs came 10 months after Dorsey announced departures of four members of Twitter’s top leadership in a move to reassure investors.
Among the new executives hired in January was Chief of Marketing Leslie Berland, who took over Twitter’s communications division when its head Natalie Kerris left the company just six months after joining the company.
Still, the social media juggernaut that boasts roughly 313 million users, reported a 6 percent increase in advertising revenue compared to last year’s third quarter, at $545 million, with 90 percent of ad revenue stemming from mobile. Its user gains were also positive, with a 3 percent year-over-year increase and a 1 percent increase from the previous quarter.
But some have worried those user growth numbers are too slow to keep up with those of its competitors, Snapchat and Facebook, while the company’s second-quarter report acknowledged “less overall advertiser demand than expected.”
The company appeared to address these worries in its latest release, telling shareholders, “We need to win our share of social marketing budgets and continue to deliver advertising solutions that extend beyond social marketing.”
Twitter's share price closed at $17.29 on Wednesday and reached as high as $18.12 in Thursday morning trading.
Earlier this month, Loop Capital and Evercore ISI upgraded Twitter from a "sell" to a "hold."