Twitter announced that it would discontinue the video-sharing mobile app Vine, as it moves to lay off 9% of its workforce worldwide for as a cost cutting move after beating Wall Street quarterly earnings expectations.
The decision comes on the heels of a failed attempt to sell Twitter as it fights against stagnant user growth and day by day growing competition from other social media platforms.
In a post published jointly by Twitter and Vine to the blog platform Medium, the social media services said that the Vine website would stay live even after the mobile app is discontinued, giving users the chance to download and save any videos.
Vine is a mobile video app where people share short video clips that play in a loop. While beloved by users and a pioneer in its own right, Vine, which launched in 2013, never took off with the masses and has lost its luster as of late.
Twitter has failed to keep pace with rivals Facebook, Snapchat and Instagram and in recent months, rumors abounded that it would be acquired.
The San Francisco based company said that it expects to take $10 million to $20 million in charges as it lays off more than 300 of its 3,860 workers.
“We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth,” CEO Jack Dorsey said in a company release.
Since the end of 2014, Twitter has lured 15 million monthly users to expand its audience to 313 million people. In that same period, Facebook brought in 319 million users, expanding its reach 1.7 billion people.
Michael Pachter, an analyst, believes that Twitter remains too complicated for most users despite numerous attempts to change that.
On Thursday, Twitter said that average monthly active users climbed 3% to 317 million during its third quarter, while average daily active usage increased 7%.
Twitter Inc. posted a loss of $102.9 million, or 15 cents per share, adjusted profit of 13 cents per share on revenue of $616 million. Analysts polled by Zacks Investment Research expected earnings of 9 cents per share on revenue of $605.7 million.
Advertising revenue rose 6% to $545 million, with mobile advertising making up 90% of the total ad revenue.
Twitter said that it was not giving revenue forecasts for the fourth quarter or full year due to restructuring in its sales department.
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Sameeksha Bhardwaj, From ITvoir News Desk