Twitter to lay off 9 percent of staff and close Vine

Twitter announces plans to drop 300 employees in a decision that comes after its efforts to sell the social networking site failed.

Photo by: Reuters (Archive)
Photo by: Reuters (Archive)

Twitter posted a net loss of $103 million for the third quarter, compared with a $132 million loss for the same period last year.

After failed efforts to sell the company, Twitter on Thursday announced plans to lay off 9 percent of its global workforce and to discontinue Vine - a video app launched in 2013 - in pursuance of what it believes to be a path to growth and profitability.

Although the job cuts as part of Twitter’s broader restructuring will affect over 300 employees, the company said under the new plan it expected to reach profitability for the first time in 2017.

Analysts however remain doubtful about Twitter's outlook for expansion, expressing concerns about its ability to entice users beyond its core base.

Twitter's decision came after it posted a net loss of $103 million for the third quarter, compared with a $132 million loss for the same period last year.

"We see a significant opportunity to increase growth as we continue to improve the core service," Twitter’s chief executive Jack Dorsey said in the earnings report.

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

Twitter’s revenues have, however, grown eight percent to $616 million, most of that from advertising.

The company’s monthly active users rose only modestly to 317 million from 313 million in the prior quarter -- a growth pace that has prompted concerns over Twitter's ability to keep up in the fast-moving world of social media.

Twitter said the restructuring "is intended to create greater focus and efficiency to enable Twitter's goal of driving toward (net) profitability in 2017."

Even though the company has never posted a profit, Dorsey said the latest quarterly results show upbeat signs.

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

Twitter was widely reported to be in talks to find a buyer, and it held meetings with Google parent Alphabet and cloud computing giant Salesforce.

But no deal materialised, with Salesforce saying that Twitter was not a good fit for the group.

Separately, Twitter said it would be discontinuing its looping video application Vine in the coming months while noting that users would "still be able to watch all the incredible Vines that have been made" to date.