Last week it seemed certain that Twitter CEO Jack Dorsey would take steps to slim a social media company that had become, in the words of several critics, bloated.
That plan was confirmed this morning in a Form 8-K filing with the U.S. Securities and Exchange Commission.
“On October 12, 2015, the Board of Directors of the Company approved a restructuring and reduction in force plan of up to 336 employees, constituting approximately 8% of the Company’s global workforce,” the document states. “The restructuring is part of an overall plan to organize around the Company’s top product priorities and drive efficiencies throughout the Company.” The cuts will be largely in the engineering and product departments.
Twitter plans to “reinvest savings in its most important priorities to drive growth.” It will incur between $10 million and $20 million in severance and related costs. The price of Twitter shares took a hit yesterday, down almost 7% to $28.74, as investors interpreted the cuts as a response to revenue pressure.
In a memo announcing the cuts, Dorsey wrote: “This isn’t easy. But it is right.”
“The team has been working around the clock to produce streamlined roadmap for Twitter, Vine, and Periscope and they are shaping up to be strong. The roadmap is focused on the experiences which will have the greatest impact. We launched the first of these experiences last week with Moments, a great beginning, and a bold peek into the future of how people will see what’s going on in the world. The roadmap is also a plan to change how we work, and what we need to do that work. Product and Engineering are going to make the most significant structural changes to reflect our plan ahead. We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce. And the rest of the organization will be streamlined in parallel.”
Twitter (TWTR) also announced that it expects its third quarter 2015 revenue to be “at or above the high end of the previously forecasted ranges of $545 million to $560 million.” It will report those results on October 27.
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