Twitter Inc. is cutting its workforce by 9% as it looks to restructure its sales, partnerships and marketing teams to help it turn a profit, the social network said today as it announced its third quarter earnings. The social network also announced plans to shutter the mobile video app Vine.
The layoffs follow weeks of speculation about companies such as Salesforce.com Inc. and Google possibly taking over the struggling social network. That may be, in part, because today’s results show that the social network continues to struggle to attract new users (it has added just 10 million monthly active users in the last year) and, in turn, advertisers’ dollars.
In fact, while user growth has been a challenge for Twitter since it went public three years ago, its advertising revenue growth is rapidly slowly. Last year, for example, Twitter’s advertising revenue grew 57.6% in the third quarter, and this year Q3 revenue was up just 6.3%.
Twitter is betting that by adding new features, such as video streaming of NFL games and other events, will help it attract new users which, in turn, would presumably lead to retailers and other marketers allocating a larger share of their ad budgets to the social network. So far, that has largely failed to pan out.
“Marketers are looking for audience growth and audience engagements sustained over time,” said Adam Bain, Twitter’s chief operating officer. “We’ve now had two quarters of that kind of growth and it’s accelerating. That should help us greatly in our conversations that we’re having with marketers. It’s also really important to have great ad products as well. We’ve put out some ads products into the marketplace that are working in terms of some of the early response that we’ve seen from Madison Avenue.”
For the third quarter ended Sept. 30, Twitter reported:
- $615.9 million in total revenue, up 8.2% from $569.2 million a year earlier.
- $545.0 million in ad revenue, up 6.3% from $512.9 million.
- Mobile advertising accounted for 90% of advertising revenue, or about $490.5 million.
- 317 million monthly active users, up 3.3% from 307 million in the same period a year earlier, and up 1.3% from 313 million in the second quarter.
- $102.9 million net loss compared with a $131.7 million loss a year earlier.
For the first three quarters of the year, Twitter reported:
- $1.812 billion in total revenue, up 20.2% from $1.508 billion a year earlier.
- $1.610 billion in ad revenue, up 19.0% from $1.353 billion.
- $289.8 million net loss compared with a $430.8 million loss a year earlier.