The shares of Twitter are trading higher after announcing its decision to cut 336 jobs as CEO Jack Dorsey leads the social media company to a path towards a stronger growth.
The stock price of Twitter climbed nearly 6% to $30.42 per share at the time this writing around 11:07 AM in New York.
Details of Twitter’s workforce reduction
In a regulatory filing with the Securities and Exchange Commission (SEC), Twitter disclosed that it would cut 336 jobs or 8% of its global workforce. The job cuts are part of its overall plan to organize around its top product priorities and to drive efficiencies across the company.
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Twitter said most of the job cuts would occur in the product and engineering departments, which were being reorganized by the company since last year. The company estimated that it would incur approximately $10 million to $20 million cash expenditures for severance payments. Its total restructuring costs are expected to be around $5 million to $15 million, which will come mostly in the fourth quarter.
Management made an “extremely tough decision”
In a letter to Twitter employees, Mr. Dorsey explained that they’ve been working around the clock to develop a streamlined roadmap, which will change how the company operates. According to him, the management believes that the engineering department will move faster with a smaller and nimbler team.
Mr. Dorsey said the management “made an extremely tough decision” to eliminate employees. He explained, “We are doing this with the utmost respect for each and every person. Twitter will go to great lengths to take care of each individual by providing generous exit packages and help finding a new job.”
“Thank you all for your trust and understanding here. This isn’t easy. But it is right. The world needs a strong Twitter, and this is another step to get there. As always, please reach out to me directly with any ideas or questions,” added Mr. Dorsey.
Twitter 3Q financial expectations
Twitter also disclosed that it is expecting to achieve revenue and adjusted EBITDA to be at or above its high-end forecasted ranges for the third quarter.
The company previously predicted to obtain revenues in the range of $545 million to $560 million and adjusted EBIT of around $10 million to $115 million.
Twitter will release its final financial results for the third quarter after the market close on October 27.