voyager624 - Fotolia

Twitter plans to cut hundreds of jobs

Twitter is expected to reduce costs by further trimming its staff, after the company failed in its bid to secure a buyer

Twitter is reportedly planning to reduce costs by cutting hundreds of jobs after the micro-blogging service failed to find a buyer, as losses and a decline in the stock price continued.

In September 2016, the company began a concerted effort to attract a buyer, but despite interest by Google parent company Alphabet, Disney and Salesforce, no deal was reached.

With a market cap of about $12.76bn and losses of around $400m a year, financial commentators said prospective buyers considered Twitter to be too expensive.

When co-founder Jack Dorsey returned as CEO in October 2015, Twitter cut 8% of jobs in a cost savings and restructuring exercise.

Dorsey’s return was partly prompted by falling investor confidence as Twitter failed to keep pace with competitors like Facebook in growing user numbers and attracting advertising revenue.

For the second quarter of 2016, the company reported that average monthly active users of the service for the quarter were 313 million, compared with Facebook’s 1.71 billion.

Now Twitter is planning to cut a further 8% of its global workforce. This will affect around 300 employees, reports Bloomberg, citing anonymous sources.

Twitter has more than 25 offices around the world and employs around 3,860 people.

The announcement of the job cuts is expected this week, with Twitter scheduled to release its third-quarter financial report on 27 October 2016.

This follows an announcement in September 2016 that Twitter would be reducing its headcount and halting engineering work at one of its development centres in India, according to Sky News.

Read more about Twitter

The loss-making company has come under increasing financial and shareholder pressure as the share price has fallen 40% in the past year.

According to market commentators, this has made it difficult to compete with rivals such as Google and Facebook by attracting talent with stock offers.

In 2015, most of Twitter’s $500m loss was due to staff equity grants, which came in at around $682m for the year, according to Digital Trends.

Twitter’s third-quarter financial report will reveal whether Dorsey’s gamble on live video and changes to the micro-blogging service’s core product have succeeded well enough to assure investors.

Read more on Social media technology