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Twitter shares fly higher as it cuts workforce by 9%

Thursday, October 27, 2016 7:25
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Shares in social media phenomenon Twitter Inc (NYSE:TWTR)  went higher in New York as its latest quarerly numbers beat expectations, it revealed it was cutting 9% of the workforce, sand said it did have a clear plan for the future.

It comes after very long speculation about it being the subject of a takeover, but buyers simply do not materialise.

Earlier this month, Salesforce – considered to be the most likely bidder -walked away from talks.

User numbers up 

The three months saw average users of the platform actually rise 3% to 317mln, while revenues rose  8% to US$616mln – which was better than had been forecast.

The net loss was US$103 mln the three months to the end of September, which was less than last year’s loss of US$132mln in the same period

Advertising revenues slowed to 6% growth in thje the third quarter to £444mln($545m), back from 18% growth in the second quarter.

The loss of 350 jobs, or 9% of the global workforce, is part of what it called a restructuring, which focuses primarily on reorganizing the company’s sales, partnerships, and marketing efforts, intended to drive profitability in 2017.

Jack Dorsey, chief executive, said: “We see a significant opportunity to increase growth as we continue to improve the core service.

A clear plan, says Dorsey

“We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth. The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”

Tina Judic, the boss at London digital marketing agency, Found, noted: “

“Further restructuring may buy Twitter time but won’t solve the underlying problem about what it is and where it wants to go.”

Last week broker Wedbush acknowledged that Twitter was “the place to go” for live broadcast – a point underlined by Twitter’s successful recent NFL Thursday Night Football project – but says management is too ‘unfocussed and complacent’.

“Until Twitter is focused on attracting new users, driving increased use by its existing users, and demonstrating its value proposition to people who don’t use the service, we expect it to grow very slowly,” said the brokerage.

Twitter shares added 1.97% to US$17.63.

Story by ProactiveInvestors


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