Twitter to cut 9% of global workforce despite ad revenue growth

Twitter has confirmed it plans to lay off 9% of its global workforce despite posting an 8% rise in revenue for the third quarter of the year.

Jack Dorsey: said he is positioning Twitter for long-term growth
Jack Dorsey: said he is positioning Twitter for long-term growth

The social media platform posted quarterly revenue of $616m (£503m) for the three months ending 30 September. 

The company’s ad revenue grew 6% year on year to $545m, of which 90% is mobile ad revenue. The majority of its revenue still comes from the US, which increased in Q3 by 1% to $347m year on year, while international revenue surged by 21% to $242m.

Twitter also announced a restructuring and reduction in headcount to its workforce by 9%, which it expects to cost as much as $30m in redundancy compensation and other costs.

The restructuring, which Twitter hopes to complete by end of 2016, will focus on reorganising the company’s sales and marketing business as the company tries to improve its profitability next year.

Its average monthly active users were up 3% year on year to 317 million, while average daily usage grew 7% compared to the same time last year.

Jack Dorsey, Twitter’s chief executive, said: "Our strategy is directly driving growth in audience and engagement, with an acceleration in year-over-year growth for daily active usage, Tweet impressions, and time spent for the second consecutive quarter.

"We see a significant opportunity to increase growth as we continue to improve the core service. We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth. The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future."

Twitter's growth opportunities

Andy Pringle, head of performance media, Performics, insisted Twitter had growth opportunities but questioned whether the platform should be compared to bigger rivals Facebook, Google and Snapchat in the social media space.

He said: " [Twitter's] broadly well received partnership with the NFL and live streaming will continue to bear fruit, especially when they secure a European partner. And with US revenue largely flat and international revenue up by a fifth, there are definitely growth opportunities.

"As the agency model changes, Twitter needs to be structured in way that allows them to have access to, and ‘mobile first’ conversations with, all departments: TV, sponsorship, content, display, social and even outdoor teams. As the platform develops, they will have to ensure that a leaner operating model still allows this."

 

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