Twitter is cutting its staff by 9% after a widely rumored sale process appears to have come to nothing.
The layoffs are expected to impact about 350 employees across sales, partnerships and marketing efforts, according to the company. The goal is to push Twitter toward profitability as an independent company.
“The restructuring allows us to continue to fully fund our highest priorities, while eliminating investment in non-core areas and driving greater efficiency,” Twitter said in its third-quarter letter to shareholders on Thursday.
Disney, Google and Salesforce were all said to be interested in bidding for the social network, but ultimately backed off. Only Salesforce admitted as much publicly.
“It wasn’t the right fit for us,” Marc Benioff, CEO of Salesforce, said earlier this month.
On a conference call with analysts after the earnings release, Twitter CEO and cofounder Jack Dorsey said his only comment on the acquisition rumors is “our board is committed to maximizing long-term shareholder value.”
“We’re taking the necessary steps to ensure Twitter is well positioned for long-term growth,” Dorsey added.
In the absence of a takeover in the near term and any significant signs of growth, Twitter must push for a turnaround as an independent company. Its first big step is to improve its bottom line through cuts.
Dorsey took over as Twitter’s permanent CEO a year ago and presided over an earlier round of layoffs that reduced staff by 8%.
He has since focused on growing Twitter through live video streaming and making it easier for users to discover relevant tweets in their news feeds, with limited results.
Twitter’s monthly active user count, easily the company’s most scrutinized number, beat estimates by rising to 317 million in the September quarter from 313 million the previous quarter. But growth remains anemic compared to newer competitors like Instagram and Snapchat.
The stagnant user growth is all the more stunning when you consider that Twitter’s relevance has arguably never been greater. It is the platform of choice for Republican presidential candidate Donald Trump and is therefore a key tool for following the U.S. election.
Twitter says it reached a “record” number of daily active users during each of the three presidential debates, but that apparently did not translate into many new monthly active users.
Twitter’s ability to attract millions of new users has been stymied by what many view as a complicated interface and the all too frequent threat of harassment on the platform. Now Twitter is promising fixes to address abuse, which it says have been in the works for months.
“Next month, we will be sharing meaningful updates to our safety policy, our product and enforcement strategy,” Twitter said in its shareholder letter.
Twitter did manage to beat Wall Street’s estimates with quarterly sales of $616 million, but growth there is slowing to a halt. Sales increased just 8% from the same quarter a year earlier. By comparison, its sales in the third quarter of 2015 were up 58% from the year before that.
Twitter posted a net loss for the quarter of $103 million. It also expects to incur as much as $30 million in costs from the layoffs, due to severance payouts and stock-based compensation.
The stock was up nearly 5% in pre-market trading Thursday.