Twitter Inc is all set to make company-wide layoffs as early as Tuesday, according to tech news site Re/code. The micro blogging firm will make cuts across most, if not all of its units, the report said, citing anonymous sources. It’s however unclear how many employees will be shown the door.
Twitter spokesman Jim Prosser declined to comment on the news.
According to latest figures, Twitter has a total workforce of around 4200. That’s, more than double the 2000 it reported during its IPO in November 2013. Engineers make up close to half of those employees, and will likely be hardest hit in the event of any layoff.
Dorsey the Resurrection Man
The move signals swift action by Jack Dorsey, who was named full-time chief only last Monday. Dorsey co-founded Twitter Inc , and has been interim CEO since July 1.
Investors have been arguing for a long time that Twitter’s bloated staff levels is slowing down growth. More so at a time when user base has flattened and sales growth is modest.
After releasing Twitter’s financial results for the quarter ended June 30, Dorsey said, “Q2 results show good progress in monetization, but we are not satisfied with our growth in audience.”
Twitter is at Crossroads
Twitter Inc has also been severely criticized by analysts and investors for not being more pro active while addressing the slowdown in user growth. Progress has also been hampered by the firm’s culture of decisions being made by committee.
“There is a huge desire for more efficiency and there’s a huge opportunity to really raise the bar on our execution,” Dorsey said on October 5 after taking over. “That’s been my number-one focus.”
Twitter Inc is working hard to revive growth. Its last quarterly results showed the rise in monthly average users was slowest since it went public in 2013 – something that Dorsey called “unacceptable.”
“Twitter is clearly going through a transition, a new CEO, new products, and this restructuring is another avenue they will need to go down,” Brian Blau, technology analyst at Gartner said. “Reducing costs by reductions is always tough, but a better focus on execution and innovation will help them in the long run.”
Shares of Twitter Inc had soared last week after Dorsey was named permanent chief. Wall Street is hoping that he would bring much needed stability within the organization. The stock jumped more than 14 percent between Monday and Friday. However, they fell in Friday’s post-market trade after the layoff news emerged.