NEW YORK - Twitter announced plans Thursday to cut nine per cent of its workforce as the struggling social network reaffirmed its strategy to drive growth after failing to find a buyer.
"We see a significant opportunity to increase growth as we continue to improve the core service," chief executive Jack Dorsey said while releasing quarterly results showing more losses.
"We have a clear plan, and we're making the necessary changes to ensure Twitter is positioned for long-term growth." Twitter reported a net loss for the quarter of $103 million, compared with a $132 million loss a year earlier. Revenues meanwhile grew eight per cent to $616 million, most of that from advertising.
The key metric of monthly active users rose only modestly to 317 million from 313 million in the prior quarter - a growth pace which has prompted concerns over Twitter's ability to keep pace in the fast-moving world of social media and attain profitability.
Twitter said the restructuring "is intended to create greater focus and efficiency" and help move toward profitability in 2017.
Twitter was widely reported to be in talks to sell the one-to-many messaging service, and it held meetings with Google parent Alphabet and cloud computing giant Salesforce. But no deal materialized and Salesforce said Twitter was not a good fit for the group.
Even though Twitter has never posted a profit, Dorsey said the results show positive signs.
"The key drivers of future revenue growth are trending positive, and we remain confident in Twitter's future," he said.
The cuts would amount to about 350 jobs based on the Twitter website's headcount of 3,860 employees worldwide. Twitter will incur a charge of $10 million to $20 million for the reorganisation.
Twitter shares jumped more than five per cent in pre-market trades, after the results topped most analyst forecasts and after one financial blog reported that Walt Disney Co. had reopened talks on an acquisition.
In a conference call with analysts, Dorsey declined to comment on the speculated, saying only: "Our board is committed to maximizing long-term shareholder value." Twitter's 2013 public offering was among the most anticipated in the sector, but after a brief rise, the shares have been slumping. Based on its most recent share price, Twitter's market value is some $12 billion.
Dorsey, one of the co-founders of the messaging platform, returned as CEO last year as part of an effort to revive growth.
Under Dorsey, Twitter added new services such as live video including partnerships with major sports organisations and new advertising options. Twitter has drawn large audiences for events such as the US presidential debates and NFL football games.
"This strategy is working," Dorsey said, claiming that Twitter "hit an inflection point" in the second quarter.
Analysts remain cautious about Twitter's ability to break out of its rut and accelerate growth. It is far behind Facebook, which has an audience of over 1.7 billion, and Facebook-owned Instagram, with some 500 million.
The research firm eMarketer estimates Twitter's share of US social network users will decline to 28.1 per cent this year and will continue to drop through 2020, as it loses users to Snapchat, Instagram and messaging apps.
According to eMarketer, around 16 per cent of the US population uses Twitter compared to 51 per cent for Facebook. On a worldwide basis, Twitter penetration is even lower at only 3.9 per cent, according to the research group.