The strategy of Twitter is to streamline operations. This will be the first job cut ever since its founder Jack Dorsey became the permanent CEO of Twitter, which is struggling to compete with the mighty Facebook.
In a letter sent to employees on Tuesday, Twitter CEO Jack Dorsey announced several moves including layoffs to get the once fast-growing social media service back on track, Wall Street Journal reported.
“We feel strongly that engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce,” Dorsey wrote.
The job cuts would mostly affect its product and engineering teams in an effort to “organise around the company’s top product priorities and drive efficiencies”.
Over the past year, the company’s workforce grew 24 percent to 4,100 employees, about half of whom are engineers.
However, Twitter’s monthly user growth climbed just 2.6 percent to 316 million in the quarter ending June 30.
In the same time, Facebook has more than doubled the strength of employees but nearly five times as many active users.
Twitter also announced that it expects revenue and a measure of its adjusted earnings to come in above the high end of its previously forecast range for the third quarter.
In his letter, Dorsey said the coming roadmap will entail “a plan to change how we work, and what we need to do that work”.
Twitter expects to incur about $10 million–$20 million in severance costs and $5million–$15 million in restructuring costs.
The company said it expected to record most of these pre-tax restructuring charges in the quarter ended December 31.
Twitter is working to ensure revenue growth after its latest quarterly results in July revealed the slowest rise in monthly average users since it went public in 2013.
Twitter reported a 61 percent increase in Q2 revenue to $502 million. It will disclose third quarter revenue this month. Most of its revenue comes from advertising.
The company posted a net loss of $137 million as it spent heavily on stock compensation to attract and retain employees against loss of $145 million in the same quarter last year.
User numbers of Twitter rose by two million in the second quarter to 304 million, though Twitter said an additional 12 million people in developing countries used text messages to gain access to the service.