Business

Twitter to cut jobs as revenue growth slows

Twitter logo Image copyright Getty Images

Twitter is cutting 9% of its workforce - about 350 jobs - after reporting a sharp slowdown in revenue growth.

In the three months to September, revenues rose 8% to $616m. That was better than forecast, but lower than the 20% rise in the previous quarter.

The number of average monthly active users rose 3% to 317 million.

Last month, Twitter hired bankers ahead of a possible sale, but bids from potential suitors such as Google and Salesforce failed to materialise.

Shares in Twitter fell 7% earlier this month after Salesforce - considered to be the most likely bidder - said it had walked away from talks.

On Thursday afternoon Twitter said it would close the Vine video sharing service, which it bought four years ago, but gave no reason for the move.

Jack Dorsey, chief executive, said he saw a "significant opportunity to increase growth" as the company improved the platform.

Live video

"We have a clear plan, and we're making the necessary changes to ensure Twitter is positioned for long-term growth," he said.

"The key drivers of future revenue growth are trending positive, and we remain confident in Twitter's future."

Twitter's user base remains less than a fifth of Facebook's and is also fewer than Instagram, the picture app that Facebook owns.

The company hopes that live video will attract more users and recently struck a high-profile deal to show National Football League games in the US on Thursday nights.

The site will also introduce "meaningful updates" next month in a bid to better protect users from abusive content - an issue that Twitter has been widely criticised about

Profit goal

Twitter remained heavily in the red in the quarter with a $102.8m net loss, down from a $131.7m loss in the same period last year.

Chief financial officer Anthony Noto said Twitter aimed to become profitable in 2017: "We intend to fully invest in our highest priorities and are de-prioritising certain initiatives and simplifying how we operate in other areas."

Image copyright Reuters

However, Wedbush analyst Michael Pachter said Twitter needed to increase revenue by between $200m and $300m a quarter to become profitable next year.

"The building blocks for revenue are increasing the number of users - and Twitter is not doing a particularly good job of that," he said.

Advertising revenue rose 6% to $545m in the quarter, while data licensing and other revenue jumped 26% to $71m.

International revenue soared by more than a fifth to $242m, growing more than in the US, where revenue was largely flat at $374m compared with the same period last year,

Twitter shares, which have fallen by a quarter this year, rose 1.3% to $17.52 in New York.

The company had 3,860 employees as of June.

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