The Jack Dorsey era at Twitter is beginning with a downer.
Twitter confirmed Tuesday that it is laying off 336 employees, or about 8% of its global workforce in a move framed as an effort to right the ship and help the company finally focus and find growth again.
Made some tough but necessary decisions that enable Twitter to move with greater focus and reinvest in our growth. http://t.co/BWd7EiGAF2— Jack (@jack) October 13, 2015
"We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce," Dorsey wrote in a memo to all employees. "And the rest of the organization will be streamlined in parallel."
Twitter has more than 4,100 employees across more than 30 offices around the world, exactly half of which are engineers who need to be compensated well enough to compete with the big tech companies and buzzy startups. Some of those engineers are now on the chopping block.
The decision to cut a significant chunk of staff will reduce those costs in the long run, though it is expected to result in $10 million to $20 million worth of severance costs upfront.
Please note that @twitter also called to tell personally I was laid off. Found out differently though before I could get that voice mail.— Bart Teeuwisse (@bartt) October 13, 2015
I was laid off from Twitter today. Best of luck to all my friends in a similar situation. Let me know if I can help!— Sebastian Motraghi (@seb_m) October 13, 2015
worst. day. ever.— kerrie (@kerrie) October 13, 2015
This recruiter is a straight talker. Yes, yes I have been. pic.twitter.com/JnW3MMbMs5— Amro Mousa (@amdev) October 13, 2015
Will miss all affected tweeps! Heavy on fast carbs this afternoon to improve my mood. #Twitterlayoffs #bummer pic.twitter.com/ju7ZKgCZsk— Fedor Korotkov (@fedor) October 13, 2015
Free tonight for a drink and a cry with any of my Twitter fam. Just reach out.— Jill Wetzler (@JillWetzler) October 13, 2015
Hi Tweeps being laid off today - many many ex Tweeps are rooting for you and will gladly hire you into our startups :) please reach out!— Mitali Pattnaik (@mitali) October 13, 2015
Under Dorsey, who took over as permanent CEO a week ago, Twitter has moved fast to change the company's narrative on Wall Street by pushing a new features like Moments for better discovery and pitching advertisers are hard on a suite of new video ad tools. Now Twitter and Dorsey want to show investors it can operate more leanly and perhaps, finally, be consistently profitable.
The key problem remains for Twitter: proving that it can reignite user growth after several consecutive quarters of flatlining numbers. The new features and corporate restructuring pave the way for a better narrative, but Twitter still needs to put up the numbers.
Twitter stock fell after the original reports first came out last week of impending layoffs, but shares shot up as much as 6% in early trading Tuesday as the company simultaneously announced revenue for the third quarter would be "at or above the high end" of previous forecasts.