Twitter’s user growth is stalling and, despite a strong revenue, the company is running at a $300 million loss.
That’s probably why new CEO Jack Dorsey is expected to begin layoffs at Twitter and halt headquarter expansion imminently, new reports claim.
“Twitter is planning company-wide layoffs next week, according to multiple sources,” Re/code reveals.
The claims are corroborated by a second report, this time in the NY Times:
“Mr Dorsey is planning a series of cost-cutting manoeuvers at the social-networking company, including layoffs and halting a plan to expand the company’s San Francisco’s headquarters, according to three people familiar with the plans, who spoke on the condition of anonymity because the details are private.”
As of last quarter, Twitter reported a workforce of approximately 4,100 employees. This is double the number of staff working at the firm in the second quarter of 2013, just prior to the company’s IPO.
It’s alleged that Dorsey wants to trim that fat on a company seen by many as bloated.
“Twitter is clearly going through a transition – a new CEO, new products – and this restructuring is an avenue it will need to go down,” explains Brian Blau, a Gartner analyst.
Blau continues: “Reducing costs is always tough, but a better focus on execution and innovation will help them in the long run.”
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The layoffs are purported to be in the pipeline for next week, and could come as soon as Tuesday 13 October.
Several areas of the company will be affected by the layoffs, including “the engineering and media teams”, according to the NYT.
Twitter was also due to go ahead with a 100,000sq ft expansion of its headquarters in San Francisco, but those plans are reportedly set to be scrapped.
Do you think Twitter should slim down its workforce? Let us know in the comments.
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