SAN FRANCISCO (TheStreet) -- This city's booming tech industry just hit the pause button.
Twitter (TWTR) - Get Report , a company that has become known for its unbridled growth -- 4,100 employees in nearly three dozen offices -- on Tuesday announced it would cut up to 336 jobs, mostly in its engineering and product teams, representing about 8% of its workforce. Since it was founded nine years ago, the San Francisco-based micro-blogging site has lost nearly $2 billion, the Associated Press reported.
Investors applauded the move, but without rousing acclaim. Twitter stock rose Tuesday by 1.1%, closing at $29.06.
Twitter's layoffs, announced by company co-founder and CEO Jack Dorsey in a letter to employees, signal that its days of rapid and bloated growth are over. Dorsey conceded as much in his note.
"We feel strongly that engineering will move much faster with a smaller and nimbler team," Dorsey said. "And the rest of the organization will be streamlined in parallel."
The painful job cuts are sure to reverberate in this tech-centric city and also serve as a wake-up call to dozens of tech startups that are struggling to turn their first profit.
The company's retrenchment will also affect a formerly vacant and blighted part of downtown San Francisco known as Mid-Market. Twitter moved its headquarters to Mid-Market in 2012, taking over an old Art Deco building. Other companies, including Square and Uber, then followed.
Before it announced the layoffs, Twitterhad been planning to expand across the street from its headquarters, taking additional space in the building that houses Square, a mobile payments start-up that is also run by Dorsey.
But now Twitter had decided "to opt out of a previously planned 100,000-square-foot expansion of its San Francisco headquarters, according to two people familiar with the company's plans," the New York Times recently reported. The company's decision to nix the expansion was first reported by the San Francisco Business Times.
Any halt in the expansion of Mid-Market would also affect the many restaurants and service businesses that have moved into the area to cater to the tech crowd.
Just last week, New York Times reporter Kim Severson, who used to work for the hometown San Francisco Chronicle, wrote about the transformation of Mid-Market. The article was titled, A San Francisco Street Transformed by Food.
"A new culinary scene has been born seemingly overnight, the child of a three-way love affair among real estate developers, tech workers and food professionals that many say is unprecedented," Severson wrote. "At the epicenter is Twitter."
Twitter's workforce has nearly doubled over the past two years, according to the Associated Press. Twitter said Tuesday that hiring will continue, even in the wake of the job cuts.
The company's laid-off engineers should fare well in Silicon Valley's booming tech industry. Signing bonuses for engineers, as well as referral bonuses for company employees who recommend an engineer, are quite common.
Consumers can think of it as a new YouTube inside Facebook, Re/code reported.
Facebook shares closed Tuesday at $94.12, a slight gain of less than 1%.
The chipmaker reported financial results after the markets closed.
Intel reported "better-than-expected quarterly profit and revenue as strong performance in its data center and Internet-of-Things businesses more than made up for continued weak demand for its chips used in personal computers," Reuters reported.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.