A Hard Week for Twitter: Earnings, Layoffs and Shutdowns
posted Sunday Oct 30, 2016 by Scott Ertz
2016 has not been Twitter's year. The company is seeing almost zero user growth and has shown continual profit loss. This has led to a recent round of conversations with potential buyers for the service, which ended in disappointment, after all potential buyers backed out.
This week, the company's financial report was released and the numbers were not positive. In the most recent quarter, the company lost $103 million on only $616 million in revenue. If their intentions are to find a serious bidder, these are problems that will need to be solved, as their current state was not enough to attract potential buyers.
The first move that the company has made to try and recover some profitability is to cut up to 350 jobs. That represents about 10 percent of the company's workforce, which is currently 3,600 people, down from 3,900 last year. Unfortunately for Twitter, cutting workforce is only a temporary fix. It can bail some water out of the ship, but it won't patch the hole.
In an attempt to patch that hole, the company has also announced that it will shutter one of its services: Vine. Twitter's take on a video service, relying on forced brevity, similar to Twitter itself, was popular in its early days, but has lost a lot of its allure. Twitter's second take on video, Periscope, has become the defacto consumer live video service. While services like Livestream and Facebook Live are the services of choice for professionals, Periscope is incredibly popular among consumers.
The popularity of live services, without the short format, have cut away at Vine's marketshare and, more importantly, the validity of the service. Ending this service is a natural progression for the company, both because of the waning usage and the waning revenue. Alone, these changes will likely not be enough to fix the problems, but it could help push the company closer to profitability and a potential buyout.
