After failing to secure an acquirer, Twitter has taken its financial woes into its own hands. Bloomberg reports that the company will be laying off about 300 employees, or 8% of its workforce. Twitter has not determined exactly which departments these cuts will come from, but the sales team is rumored to be taking the biggest hit. This speculation makes sense, considering the fact that Twitter currently spends more than twice as much in sales and marketing as its rivals to earn each dollar of revenue.
By no means are these layoffs surprising. Many critics have been calling for staff cuts at Twitter, claiming that a social network that has not significantly changed its service since its inception does not require a workforce of around 4,000. Twitter’s motive behind the layoffs is clear — it needs to reduce the platform’s exorbitant operation costs to help to make the company financially profitable and therefore, more appealing to buyers.
Some Twitter employees may even be relieved by the cuts. Morale among staff has been very low as the social network struggles in user growth and sales. This sentiment prompted CEO Jack Dorsey to send out a company-wide memo in hopes of re-inspiring his workforce. However, the attempt wasn’t very effective, as some employees have reportedly stopped showing up to work at all. Twitter has also heavily used stock as a form of employee pay, so the 40 percent fall in Twitter’s stock this past year has definitely hit workers hard.
We’re not sure if these layoffs will be enough to save the sinking ship called Twitter, but they are definitely a step in the right direction. We can expect a formal announcement from Twitter regarding the job cuts later this week.