New CEO Jack Dorsey tells employees the cuts will help the company focus on the “experiences which will have the greatest impact.”
Twitter CEO Jack Dorsey is cracking the whip.
The social network will lay off up to 336 employees, or about 8 percent of its workforce, as it looks to streamline its operations, Dorsey said Tuesday.
This is Dorsey’s first major business move since being named permanent chief executive on October 5. Dorsey, who was the San Francisco-based company’s first CEO before he was pushed out seven years ago, had been interim chief executive since July. He is also the CEO of Square, the mobile-payments company he founded in 2009.
Known for the brevity and speed of users’ posts, Twitter has been struggling to become more inviting and engaging to a broader audience. Last week, the social network unveiled “Moments,” the first stage of a product revamp featuring curated tweets, videos and images of major trending events, such as concerts, sports contests and breaking news. The job cuts announced Tuesday will produce a “faster” and “nimbler” organization that can deliver the next phases of product development, Dorsey said in an email to employees.
“The road map is focused on the experiences which will have the greatest impact,” Dorsey wrote. “We launched the first of these experiences last week with Moments, a great beginning, and a bold peek into the future of how people will see what’s going on in the world.”
Twitter had 4,100 workers around the world, half of them engineers and the rest spread among administrative and marketing, as of June 30. The layoffs will be felt across the company, Dorsey said.
“We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce,” he said. Dorsey also told affected employees they will receive “generous exit packages and help finding a new job.”
Twitter in July reported 316 million monthly active users in the second quarter, up 3 percent from the previous quarter. In contrast, more than 1.5 billion users regularly engage on Facebook and 400 million people are active on Instagram. That crimps Twitter’s ability to woo advertising dollars since companies are keen to reach the largest audiences they can.
To help boost its appeal, Twitter in August made it easier for users to send longer direct messages to specific individuals. Last month it added a button that lets users buy products directly from a tweet.
Analysts and investors anticipated the job cuts after reports surfaced that the company opted not to lease up to 100,000 square feet of additional space across from its San Francisco headquarters.
Analyst Shebly Seyrafi with FBN Securities called the layoffs a “one-time” move to “clean the slate and right-size” Twitter. Seyrafi also noted that Moments has been garnering generally positive reviews.
The layoffs also will “give a jolt and a sense of urgency to a waning corporate culture,” said Cantor Fitzgerald analyst Youssef Squali.
Twitter’s stock rose as much as 5 percent Tuesday on news of the layoffs.
Twitter expects to spend $5 million to $15 million in total restructuring charges related to the job cuts, the company said in an SEC filing. Twitter is scheduled to report its results for the third quarter on October 27.