Twitter has lost almost half of its advertising revenue since it was bought by Elon Musk for $44bn (£33.6bn) last October, its owner has revealed.
He said the company had not seen the increase in sales that had been expected in June, but added that July was a “bit more promising”.
Mr Musk sacked about half of Twitter’s 7,500 staff when he took over in 2022 in an effort to cut costs.
Rival app Threads now has 150 million users, according to some estimates.
Its in-built connection to Instagram automatically gives the Meta-designed platform access to a potential two billion users.
Meanwhile, Twitter is struggling under a heavy debt load. Cash flow remains negative, Mr Musk said at the weekend, although the billionaire did not put a time frame on the 50% drop in ad revenue.
In a tweet, he said: “Need to reach positive cash flow before we have the luxury of anything else.”
After laying off thousands of employees and cutting cloud service bills, Mr Musk said Twitter was on track to post $3bn (£2.29bn) in revenue in 2023, down from $5.1bn in 2021.
The development is the latest sign the aggressive cost-cutting measures have not been enough to ignite a return of advertisers who fled after changes to its content moderation rules.
That is despite an interview Mr Musk gave to the BBC in April, in which he suggested that most had returned to the site.
However, Meghana Dhar, the former head of partnerships at Snap and Meta, which owns the new Twitter rival Threads, said the company had been struggling prior to Mr Musk’s buyout.
“Elon and Twitter are in a candidly tough position right now,” she told the BBC’s Today programme. “To be fair to Elon though, we’ve seen that decline in Twitter revenue and growth in revenue since pre-Elon – there’s been kind of a steady decline.”
Lucy Coutts, investment director at JM Finn, said: “You wouldn’t bet against him, he’s a kind of mercurial figure and I think probably he will turn it around but it is just going to take longer.
“But unfortunately he has got $13bn of debt to pay by the end of July so we may see more pressure on the shares in Tesla if he has to sell more of his stake in that company.”
Mr Musk is also the chief executive and majority shareholder of electric car maker Tesla, which will report its latest quarterly financial results on Wednesday.
Linda Yaccarino, previously head of advertising at NBCUniversal, was taken on as chief executive of Twitter in June – a move suggesting advertising sales are still a priority for the company.
Ms Yaccarino has said Twitter plans to focus on video, creator and commerce partnerships. It is said to be in early talks with political and entertainment figures, payments services, and news and media publishers.