After just a week back on the job, Twitter CEO Jack Dorsey is making his presence felt in a big way, announcing plans to cut up to 8 percent of the workforce at the money-losing messaging company. “Twitter will go to great lengths to take care of each individual by providing generous exit packages and help finding a new job”.
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The layoffs come about a week after the microblogging service provider appointed its co-founder Jack Dorsey its permanent chief executive.
The news seemed to please investors, as Twitter’s shares climbed 2.3 percent to $29.41 in premarket trading.
Cutting costs can boost profits, but at Twitter, it has also raised uncertainty about the future and the company’s desire for aggressive growth and the larger audience it has sought for so long.
“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”, said Dorsey in a letter filed with the Securities and Exchange Commission. The new features and corporate restructuring pave the way for a better narrative, but Twitter still needs to put up the numbers.
After returning as CEO, Dorsey promised to make Twitter even more accessible to the masses by next year.
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The company said Tuesday that it would pay between $10 million and $20 million, nearly all in severance costs. Analysts polled by Thomson Reuters expect the company to report revenues of $559.19 million for the third-quarter. The accounting charge for the reorganization is expected to be lower, ranging from $5 million to $15 million, because Twitter a few of the departing employees will be losing stock options that didn’t vest.
