Twitter sees road to profit with staff cuts
STILL losing money and without a merger partner, Twitter sees a path to profitability as the struggling social network unveiled job cuts as part of a reorganisation.
The messaging platform said it would cut 9 percent of its workforce after another money-losing quarter, but suggested it could reach profitability for the first time next year.
“We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for longterm growth,” chief executive Jack Dorsey said.
However, analysts remain sceptical about the company’s outlook for expansion, expressing concerns about its ability to entice users beyond its core base.
Twitter reported a net loss for the quarter of US$103 million, compared with $132 million a year earlier. Revenues grew 8pc to $616 million, mostly from advertising.
The key metric of monthly active users rose only modestly to 317 million from 313 million in the prior quarter – a growth pace that has prompted concerns over Twitter’s ability to keep up in the fast-moving world of social media.
The restructuring “is to create greater focus and efficiency to enable Twitter’s goal of driving toward profitability in 2017”, the company said.
Twitter was reported to be in talks to find a buyer, and has held meetings with Google parent Alphabet and cloud computing giant Salesforce.
But no deal materialised, with Salesforce saying Twitter was not a good fit for the group.
Separately, Twitter said it would discontinue its looping video application Vine in the coming months.
Although Twitter’s 2013 public offering was among the sector’s most anticipated, shares have been slumping after only a brief rise. The company’s market value is about $12 billion based on its most recent share price.
Twitter has since added new services such as live video, including partnerships with sports organisations and new advertising options. It has also drawn large audiences for events such as the US presidential debates and NFL football games.
Still, analysts remain cautious about Twitter’s ability to break out of its rut and accelerate growth. It is far behind Facebook, which has an audience of more than 1.7 billion, and Facebook-owned Instagram, with some 500 million. –