Sunday 21 January 2018

Twitter to axe 336 workers as new CEO slashes costs

Twitter is to cut more than 300 jobs in a bit to cut costs
Twitter is to cut more than 300 jobs in a bit to cut costs

Twitter is laying off 336 employees, signalling CEO Jack Dorsey's resolve to slash costs while the company struggles to make money.

The cutbacks translate into about 8% of Twitter's workforce of 4,100 people.

The purge comes two weeks after Twitter brought back one of its co-founders as permanent CEO in hopes that Mr Dorsey would be able to resolve problems that have slowed the messaging service's user growth and compounded an uninterrupted cycle of financial losses.

Cutting costs can boost profits, but at Twitter, it has also raised uncertainty about the future and the company's desire for aggressive growth and the larger audience it has sought for so long.

The lay-offs may be a sign of desperation at a sinking company, said Edison Investment Research analyst Richard Windsor.

"It is important to run a tight ship, but simply cutting jobs is often the action of a company that does not know what else to do," Mr Windsor said.

Yet Twitter's workforce has nearly doubled over the past two years, weighing on efforts to turn a profit for the first time in its nine-year history.

Since Mr Dorsey and his partners started the service, Twitter has lost nearly 2 billion US dollars (£1.3bn); investors are now worried that the company's third-quarter results, scheduled for October 27, will be another disappointment.

Mr Dorsey has acknowledged that Twitter is too confusing for many people to use, turning off new users at a time when other social services such as Snapchat and Facebook's WhatsApp have grown in popularity.

As part of its revival plan, Twitter last week unveiled a new feature called "Moments" that packages commentary, video and photos about major events that have captured people's attention.

The work on Moments began while Mr Dorsey's predecessor, Dick Costolo, was still Twitter's CEO.

After returning as CEO, Mr Dorsey promised to make Twitter more accessible to the masses next year.

Press Association

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