Let me do a mini-askHN: I'm thinking of joining Twitter to work on their anti-abuse efforts. What factors should I consider in my decision?<p>At first consideration, this news doesn't worry me a ton. They provide a product that provides a lot of user value, just to a smaller user base than they/investors hoped. They've found a reasonable way to monetize it, with $2b+/year in revenue. Their expenses are too high for that, but not egregiously so, with previously committed stock compensation being a big chunk of things. There's still a lot they can do with the product. And they've got a unique value that's hard for other people to replicate: it's the place for public figures (public figures at all scales) to interact.<p>Am I crazy here? I know I'm taking a risk, but I'm not seeing more risk than, say, joining a Series A startup, which I've happily done before.
What I love is this:<p>"The move could hurt the companies image in San Francisco where the competition for engineers is fierce."<p>I live in New York and I would never work there. Why would anyone want to join a sinking ship? It's image is gone all in the name of the mighty stock price.
<i>Reuters</i> leading with "Twitter beats revenue estimates..." while the <i>Wall Street Journal</i> chose "Twitter to Cut 9% of Workforce as Revenue Growth Slows" [1]. This is usually a sign of a political fragmentation, <i>e.g.</i> within management, within the Board, between the former or within the shareholder base.<p>(<i>Reuters'</i> correspondent is based in Bangalore; the <i>Journal</i>'s in the Bay Area [2]. Neither contains any direct quotes. <i>Journal</i> cites multiple Wall Street analyst reports.)<p>[1] <a href="http://www.wsj.com/articles/twitter-to-cut-workforce-as-revenue-growth-slows-1477566772" rel="nofollow">http://www.wsj.com/articles/twitter-to-cut-workforce-as-reve...</a><p>[2] <a href="https://www.linkedin.com/in/dseetharaman" rel="nofollow">https://www.linkedin.com/in/dseetharaman</a>
My belief, sadly held, is that this is just the 2nd step of a Yahoo-scale transition. It won't be the user numbers that get them, it will be the ads side. Twitter is going to get a shrinking piece of the ad budget, especially as new entrants arrive. Which new entrants you ask? Snapchat, for one. Pinterest is heating up as well.
Also Vine is getting shut down: <a href="https://medium.com/@vine/important-news-about-vine-909c5f4ae7a7" rel="nofollow">https://medium.com/@vine/important-news-about-vine-909c5f4ae...</a>
> Twitter Inc's quarterly revenue growth slowed sharply in the third quarter but topped analysts' expectations, and the company said it would cut 9 percent of its global workforce.<p>> Revenue rose about 8 percent to $616 million, above the average analyst estimate of $605.8 million. The company reported a 20 percent rise in revenue in the previous quarter and 58 percent last year.<p>> Twitter had 3,860 employees globally as of June. The layoff could hurt the company's image in San Francisco, where the competition for engineering talent is fierce.<p>Total revenue of $616M and 3,860 employees (pre-layoff) means they've got $159K of <i>revenue</i> per employee. If the majority of their work force is engineers that's pretty weak. After adding in health insurance, 401k, real estate (for office locations), and all the rest of the usual expenditures, it's no wonder they can't turn a profit.<p>> "We're getting more disciplined about how we invest in the business, and we set a company goal of driving toward GAAP profitability in 2017," said Chief Financial Officer Anthony Noto.<p>They're going to need go <i>significantly</i> deeper than 9% to get to profitability.<p>EDIT: <i>Per the replies the revenue numbers quoted are per-quarter, not annual. Still begs the question of how they hell they're not profitable making $636K per employee.</i>
One of my concerns with Twitter is that I think their usage is going to drop considerably after the election is over. I say this only because half of Twitter mentions in the press related to Trump tweets.
They spend about 2.5 billion dollars to make 2 billion dollars. Not a great business model. If they can do more cuts and bring the expenses way down and seriously turn around the product, they will have a good future. I almost feel, they need somebody like Eric Schmidt to manage the company while Jack learns and focuses on the product.
A question for those with far more management experience than me at large companies - why cut 9%? Is it really twitter's management view that they are only slightly over staffed? Do they think that their employees are going to believe this is the last cut?<p>9% seems like a large enough number to destroy moral, but too small to make any material differences to the cost base.