Twitter has reportedly abandoned its plans for a big expansion into Uber and Square’s 1455 Market St Headquarters, says a report from Biz Journals, which cites three people familiar with the company’s plan. A hiring slowdown has been cited as the primary reason for shelving the plan.
Slow user growth to blame
Twitter had almost finalized the deal with 1455 Market landlord Hudson Pacific Properties before putting it on hold. With this deal, Twitter would have added about 100,000 square feet of former Bank of America space which is a block away from its current headquarters located at Market Street. The last-minute backing out by the company indicates that it is scrambling to regroup.
Twitter’s slowing growth and lagging share price are said to be responsible for the breakdown of the deal. Even though the company’s revenue performance recently exceeded Wall Street’s expectations, user growth has almost stagnated, and this is a major concern for advertisers. The number of Twitter users grew by only 2 million in the second quarter.
The micro-blogging firm currently has 304 million users, which is much below the user count of arch rivals Facebook and Instagram. According to the report, hiring in the company has slowed down majorly, while several managers and engineers have left from the company. Meanwhile, the company signed a big deal to expand in Dublin, Ireland. Owing to its lucrative tax structure, the country is seen as an overseas hotbed by many U.S. technology companies.
Twitter names Dorsey as CEO
Ending months of speculation, Twitter has finally named co-founder and interim Chief Jack Dorsey as its permanent CEO. Dorsey will continue to head Square, and this could set up conflicts of interest. Dorsey has been interim CEO since Dick Costolo stepped down on July 1. Dorsey will remain on Twitter’s board but will no longer be chairman. On Monday, the micro-blogging firm informed investors that Costolo resigned from the board on Sept. 30.
If Twitter had opened an office at 1455 Market, it would have come in the same building where the digital payment startup Square has its office. At around 9:40 a.m. Eastern time today, Twitter shares were up 1.82% at $26.78. Year to date, the stock is down by over 25%, while in the last year, shares are down by over 50%.