Twitter
TWTR
recently announced the layoff of 30% of employees from its recruitment team amid the $44 billion takeover by Elon Musk. The micro-blogging platform had earlier announced halting most hiring processes across various divisions as part of a broader attempt to cut costs.
The sacked employees will receive severance packages and the company will reprioritize the remaining recruitment staff.
Of late, the company has been dealing with increasing business pressure and a decline in revenue growth. The company removes 1 million spam accounts each day. Spam accounts make up less than 5% of the company’s daily monetizable users, which Twitter defines as daily users who are logged in and authenticated.
The briefing comes after Musk threatened to halt a $44 billion deal to purchase Twitter unless the company showed proof that spam and bot accounts were fewer than 5% of users who see advertising on the social media service.
Twitter Joins Other Tech Giants in Cutting Costs & Pausing Hiring
Twitter is betting that cost-cutting measures might aid performance and help impede the 69.9% slump in shares in the year-to-date period, compared with the Zacks
Computer and Technology
sector’s fall of 36%.
This Zacks Rank #3 (Hold) company’s layoffs, while tied to its slowdown of revenues, are part of a larger contraction of jobs within the tech industry. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Several tech companies recently announced hiring freezes and layoffs, such as Facebook’s parent company,
Meta Platforms
META
,
Netflix
NFLX
,
Microsoft
MSFT
, NVIDIA, Intel, Amazon, Tesla, Uber and Robinhood, among others.
Meta is limiting its intake of new employees to cut costs due to weak revenue forecasts. Facebook’s parent company is pausing or slowing down hiring for most mid-to-senior level positions after announcing a strategy to expand into the metaverse. The social media giant has 71,970 employees worldwide.
Over the past two months, Netflix has fired over 450 employees, globally, across multiple business functions to reduce costs amid slowing revenue growth. The near-term outlook is not favorable as Netflix expects to lose two million paid subscribers in second-quarter 2022. The company is also exploring lower-priced, ad-supported tiers in a bid to bring in new subscribers and revenues after years of resisting advertisements on the platform.
Microsoft is slowing down the hiring for its Office, Windows, and Teams groups to better prepare itself for the coming fiscal year and contend with the current economic environment. The tech giant reported strong fiscal third-quarter earnings, with a 26% year-over-year increase in cloud revenues. However, in early June, the company revised its fiscal fourth-quarter revenues and earnings guidance downward, citing the impact of foreign exchange fluctuations. The tech giant has 181,000 employees.
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