witter Inc said Thursday it would cut 9 percent of its global workforce to keep costs down even as quarterly results eclipsed Wall Street’s beaten-down expectations, lifting shares that had fallen after a failed effort to sell the company.
More than 300 Twitter employees will be affected by the layoffs as part of a broader restructuring, a figure similar to an earlier round of reductions announced a year ago. Separately, the company announced it would discontinue Vine, a video app launched in 2013 that played brief clips on a repeat loop that struggled to compete with Facebook’s Instagram.
The reductions of staff and services were blunted somewhat by the backdrop of third-quarter revenue growth that slowed sharply but topped analysts’ expectations. Its stock was up 1.6 percent to $17.56, after rallying 5 percent in premarket trading.
Revenue rose about 8 percent to $616 million, above the average analyst estimate of $605.8 million. The company had reported a 20-percent rise in revenue in the previous quarter and 58 percent in the year-ago quarter.
Twitter, which has seen user growth stall amid competition from nimbler rivals such as Instagram and Snapchat, said its user base ticked up 3 percent to 317 million average monthly active users in the quarter.
Analysts, on average, had expected 316.3 million monthly active users, according to market research firm FactSet StreetAccount.
“The building blocks for revenue are increasing the number of users, and Twitter is not doing a particularly good job of that,” Wedbush Securities analyst Michael Pachter said. He added that Twitter needed to grow revenue by $200 million to $300 million a quarter to achieve 2017 profitability.