Twitter lays off 336 of employees amidst low earnings and lower than expected user growth.
Twitter has laid off 8 percent of its workforce making the first major action under newly appointed CEO Jack Dorsey. It also marks the first major layoff in the company’s nine-year history, as it tries to set new goals under Dorsey’s leadership.
In an email to employees titled “a more focused Twitter”, Dorsey said, “This isn’t easy. But it is right. The world needs a strong Twitter, and this is another step to get there.”
The company further adds that this layoff will mostly affect its engineering teams. It said it’ll be investing the money to streamline its priorities. Shares of Twitter rose by 5 percent since the announcement to $30.20 in market trading today.
The microblogging site will be bearing about $5 million – $15 million in restructuring charges, along with $10 million – $20 million in severance costs. The company is expected to record most of these restructuring charges for the quarter ending December 31.
The move had been a long time coming as the company struggles with user growth, a solution which newly appointed CEO Jack Dorsey and other top execs say will need proper rethinking.
Mr. Dorsey and his team said that the first part of the plan after his new role CEO was made official last week was the release of Moments, a curated version of Twitter that clubs together the best tweets about live events. In his letter to employees, Mr. Dorsey said the company’s future plans will entail “a plan to change how we work, and what we need to do that work.”
Twitter has been undergoing a massive change since Dick Costolo stepped down as CEO after weaker than expected Q1 earnings. The company recently also acquired Periscope, along with striking a new deal with Google that’ll see Tweets being listed in Google Search. Twitter reportedly has about 303 million monthly active users and has lagged way behind Facebook in getting the same popularity struggling to attract new users to sign-up.