Jack Dorsey outlined job-cut plans a week after being named Twitter Inc.’s chief executive officer, saying the move is aimed at getting products out the door more swiftly.
Twitter will eliminate as many as 336 positions, or about 8 percent of its global workforce, the San Francisco-based company said in a filing Tuesday.
Most of the affected positions will be in the product and engineering departments. Twitter has struggled with bloat in the groups, resulting in overlapping tasks and goals, which created a culture of indecision and made it harder for the company to move quickly, former employees have said.
Dorsey, a co-founder of the company, has pledged to make Twitter more accessible. While hardcore users cherish its rapid-fire, text-heavy format, others find the service impenetrable and confusing. As a result, many sign up and then drop out, hampering Twitter’s growth and long-term prospects. The company is working to improve its product, making it easier for people to join and understand how to find good content.
“We feel strongly that engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce,” Dorsey, who had been interim CEO since June, wrote in a letter included in the filing. “This isn’t easy. But it is right. The world needs a strong Twitter, and this is another step to get there.”
Twitter shares rose 5.5 percent to $30.34 at 9:58 a.m. in New York. The stock was down 20 percent this year through Monday.
Executives Spared
The cuts don’t involve any executives, according to Jim Prosser, a Twitter spokesman. The restructuring will cost between $5 million and $15 million, with the expenses coming mostly in the fourth quarter, Twitter said. The company employs 4,100 people, according to its website.
Twitter said third-quarter revenue should be at or above the high end of its previously forecast range of $545 million to $560 million.
The restructuring makes sense because of “the lack of cohesion in the company’s mission and lack of focus,” James Cakmak, an analyst at Monness, Crespi, Hardt & Co., wrote in a note to investors. Cakmak, who has a buy rating on the stock, said Facebook had a similar-sized workforce in 2012 when it had $5 billion in revenue. Analysts on average estimate Twitter will generate $2.2 billion this year, according to data compiled by Bloomberg.
source: Bloomberg
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