Financial news agency Bloomberg reports that Twitter is set to cut up to 300 of its workers. The announcement comes before the social media site prepares to release its third-quarter earnings this week.
According to Bloomberg, social media giant Twitter is planning to cut up to 300 workers, or eight percent of its staff. An official announcement is expected by the end of the week.
Twitter's third-quarter earnings will be released on Thursday. Twitter is losing money and trying to limit spending as sales growth slows. Though Twitter exceeded 300 million active monthly users, it has less than one fifth of Facebook and Instagram's monthly users. Twitter has reportedly considered selling the company - with possible buyers including Salesforce.com Inc., The Walt Disney Co., and Alphabet Inc. (the parent company of Google). But it's rumored that all have backed out.
Twitter has lost 41.53 percent of its yearly cumulative returns, and a 40 percent fall in the value of its stock price over the past year has made it difficult to pay its engineers with stock. That makes it harder for the company to recruit or maintain talent against competitors Google and Facebook.
Twitter may look at cutting sales and marketing, where it spends more than twice as much as its rivals. In the first six months of 2016, Twitter's sales and marketing spending was $473 million (435 million euros) or 40 percent of its revenue, as compared to 19 percent of revenue at Yahoo, 15 percent at Facebook and 12 percent at Alphabet.
Twitter may also have to cut back on research and development. Twitter spent 28 percent of its revenue on research in the first half of 2016, compared to 24 percent at Facebook, 23 percent at Yahoo and 16 percent at Alphabet.
kbd/gsw (Reuters, Bloomberg)