TWTR Up 5% On Major Job Cuts, Lowered Guidance

"Sell the rumor, buy the news" appears to be the meme for now as TWTR delivers on the chatter:

• *TWITTER'S DORSEY: 'MADE SOME TOUGH BUT NECESSARY DECISIONS'
• *TWITTER CUTTING UP TO 8% OF JOBS, UP TO 336 JOBS
• *TWTR SEES 3Q ADJ EBITDA AT/ABOVE TOP END $110-$115M, EST $116.7M

So drastic job cuts, lowered revenue and EBITDA guidance, and "necessary" decisions - TWTR up 5% in the pre-market.

From TWTR's 8-K

On October 13, 2015, in connection with the announcement of a restructuring described further below, Twitter, Inc. (the “Company”) announced that it expects revenue and adjusted EBITDA for the third quarter of 2015 to be at or above the high end of the previously forecasted ranges of $545 million to $560 million and $110 million to $115 million, respectively. The foregoing information is preliminary and subject to completion of the Company’s quarter-end financial reporting processes and review. More information about the Company’s financial performance in the third quarter of 2015 will be provided when the Company reports final results on October 27, 2015, after market close.

On October 12, 2015, the Board of Directors of the Company approved a restructuring and reduction in force plan of up to 336 employees, constituting approximately 8% of the Company’s global workforce.  The restructuring is part of an overall plan to organize around the Company’s top product priorities and drive efficiencies throughout the Company.  The Company intends to reinvest savings in its most important priorities to drive growth. 

The Company estimates it will incur approximately $10 million to $20 million of cash expenditures, substantially all of which will be severance costs. Total restructuring expenses are estimated at $5M to $15M, which is lower than cash restructuring costs due to a credit related to non-cash stock-based compensation expense reversals for unvested stock awards. The Company expects to recognize most of these pre-tax restructuring charges in the quarter ended December 31, 2015. 

CEO Jack Dorsey's letter to employees...

And "buy the news"

Meanwhile, here is an artist's impression of Jack Dorsey finally revisiting the TWTR R&D lab after years of absense:

Comments

[-.-]

#recovery

[Headbanger]

<--- FUWK TWTR

<--- FWUK TWTR

[SloMoe]

Let's see if I get this right: #fucktwtr

[StackShinyStuff]

And it goes without saying that these severance/restructuring costs will be backed out of ADJ EBITDA...

[NoDebt]

Just wondering why 8% of their workforce even adds up up to 336 jobs.  How many people does it really take to keep the lights on at a place that's basically just an iPhone app?

[I AM SULLY]

But TWITTER is the most advanced "twitter" we've ever seen ...

(really)

[astoriajoe]

ahh, ebitda guidance. So no actual earnings or anything. what a relief. 

[Catullus]

I've only ever seen Twitter successfully used to publicly shame/complain about shoddy customer service. It really is the Comment Card in the Concentration Camp

[koaj]

#fuckhashtags

If they allowed porn or nudity on periscope, maybe they can make some money that way

[SloMoe]

"adjusted EBITDA" WTF?

Hey, Jack, how about throwing a little GAAP numbers our way? Too ugly? Oh, gottcha...

[mijev]

"The restructuring is part of an overall plan to organize around the Company’s top product priorities and drive efficiencies throughout the Company."

I.e. get rid of people that actually do stuff and leave the less than useless c-levels in place but give them extra bonuses.

[Arnold]

H1B Vice presidents are much cheaper.

[Seer]

Just imagine how much the stock would jump if they got rid of everyone!

[NoWayJose]

It will happen when the Twitter software becomes "self-aware"...

[Gatos Locos]

What is twitter?  Never used it.  Seems like a waste of time.

[NoWayJose]

A replay of the great market rebound in 2009-2010 where stocks rose because of job cuts even while revenues were tumbling.

[Dr_Snooz]

336 jobs? Why does everyone keep acting like this company matters? We're talking about a platform where prominent people pay nobodies to write aphorisms in their names, and then buy fake followers to make it look like other nobodies care???

Here's hoping the folks being laid-off find more productive uses for their time. Like growing wholesome food. For instance.

[Consuelo]

Put quite nicely, Dr.

Wake me up though, when the light bulb goes on over joe market's head, that that entire 'zeitgeist' if you will, is nothing but a distraction, and 336 rapidly turns into 33,600...

[itstippy]

A shrewd investor is always on the lookout for established companies that slash their workforce and report reduced earnings.  These are clear indications of a well-run organization expanding their operation to meet growing demand for their product.  Twitter is a strong "buy".

[Consuelo]

So uh, S.F. rents going down then...?