Twitter, the social media giant that’s been the topic of recent M&A scuttlebutt, said it is cutting 9% of its workforce globally amid a restructuring aimed at driving profitability.
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“The restructuring, which focuses primarily on reorganizing our sales, partnerships and marketing efforts, is intended to create greater efficiency as we move toward our goal of driving toward GAAP profitability in 2017,” the company said in its Q3 shareholder letter, noting that Twitter will be reducing its number of sales channels from three to two.
Twitter also announced that it will be shutting down the mobile app for Vine, its looping video clip service, in the coming months, but will be keeping the Vine website online.
Ian Fogg with IHS Markit told BBC that rising competition from other platforms did Vine in, while The Wall Street Journal noted that Viners and ad buyers were leaving because Vine could not implement a sustainable ad model.
"The problem is that @vine didn't keep pace with the innovation from @Snapchat, @facebook and other players in the market." @ianfogg42 #tech https://t.co/Td1vJfCttD
— IHS news (@IHS_news) October 27, 2016
Twitter said it expects to incur $10 million to $20 million of cash expenditures as a result of the workforce restructuring, with most of the pre-tax workforce restructuring charges to be taken in Q4.
Twitter posted Q3 revenue of $616 million, up 8% versus the year-ago quarter, above previous guidance of between $590 million to $610 million, and a net loss of $103 million (15 cents) per share.
The company generated total Q3 ad revenue of $545 million, up 6%. Twitter said brand advertisers are still its largest contributor to revenue. Promoted Tweets with video were its single largest revenue generating ad format, as traditional Promoted Tweets continued to decline.
Data licensing and other revenue totaled $71 million in Q3, up 26% year-over-year.
Twitter ended the quarter with $3.7 billion in cash, cash equivalents, and marketable securities.
Twitter said total monthly active users grew to 317 million in Q3, up 2% year-over-year, with average daily active usage rising 7% year-over-year.
The company is not providing Q4 and full-year revenue guidance, but did say it expects adjusted EBITDA for full-year 2016 to be in the range of $700 to $715 million.
Average monthly active users (MAUs) were 317 million for Q3, up 3% year-over-year and compared to 313 million in the previous quarter.
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