Twitter Reportedly Planning to Lay Off 300 Employees
Twitter is planning to cut about 8 percent of its workforce, or about 300 staffers, Bloomberg News reported, citing people familiar with the situation. That would be the same percentage it cut last year when co-founder Jack Dorsey took over as CEO.
The layoffs could be announced before the social media company reports its third-quarter earnings on Thursday morning.
Twitter's revenue growth has slowed, leading it to reduce spending to improve its bottom line.
The company's stock has been under pressure as of late as it has become increasingly unlikely that it will find an acquirer after Salesforce, which had expressed interest, said it would make a bid. The company began seriously exploring a sale in September, and several potential bidders emerged, including Salesforce, Google, Verizon and Walt Disney.
"As Twitter generates only limited free cash flow, has a bloated cost structure and limited growth trajectory, we continue to see a takeover in the near term as exceedingly unlikely," Wedbush Securities analyst Michael Pachter wrote in his earnings preview report.
Analysts and industry observers have wondered if management will outline any strategy changes if no deal materializes.
Reiterating his "neutral" rating and $14 price target on Twitter's stock price, Pachter also wrote: "Until Twitter is focused on attracting new users, driving increased use by its existing users, and demonstrating its value proposition to people who don't use the service, we expect it to grow very slowly. We think that its service is too complicated and difficult to use for the average internet user despite multiple changes."
He predicts third-quarter revenue "at the high-end of guidance, driven by the U.S. presidential election, live event streaming and video." Pachter also forecasts quarterly revenue of $610 million, adjusted earnings before interest, taxes, depreciation and amortization of $150 million and earnings per share of of 8 cents.
This article was originally published by The Hollywood Reporter.