Workforce Reductions at The Trade Desk Amid Market Challenges

The digital advertising technology firm The Trade Desk has initiated another round of job cuts, marking its second workforce reduction within a twelve-month period. Although the latest action impacts a small fraction of its employees, the company's stock continues to face significant headwinds, having shed approximately 70% of its value since its annual peak.

Despite the pronounced pressure on its share price, The Trade Desk's core business operations continue to expand. For the third quarter of 2025, the company reported revenue of $739 million, representing an 18% year-over-year increase. Its earnings per share of $0.45 also came in slightly ahead of consensus analyst forecasts.

Management has provided fourth-quarter revenue guidance of at least $840 million. The firm further highlights that its client retention rate has remained consistently above 95% for the past eleven years.

Details of the Latest Staffing Cuts

On December 17, 2025, company leadership confirmed the elimination of 39 roles during an internal meeting. The reductions span several departments, including sales and customer service. With a total workforce of around 3,900, the cuts affect less than one percent of staff.

A company spokesperson framed the decision as a strategic move to "ensure we possess the correct skills and experience to drive innovation and deliver value for the world's largest advertisers within a rapidly evolving ad-tech landscape."

This action follows a more substantial reorganization almost exactly one year prior. In December 2024, Chief Executive Jeff Green described that earlier restructuring, which focused on customer-facing teams, as the most significant in the company's history.

Should investors sell immediately? Or is it worth buying The Trade Desk?

Intensifying Competitive Landscape

The competitive environment is becoming increasingly challenging. Rivals like Amazon and Google are applying considerable pressure. Amazon's advertising business has grown to generate annual revenue exceeding $50 billion and has secured partnerships with major streaming platforms, including Netflix. This competition is particularly acute in the connected TV (CTV) sector, a key growth area for The Trade Desk.

In response, The Trade Desk is leveraging its AI-powered Kokai platform, which now manages over 70% of client spending, alongside its identity solution, Unified ID 2.0.

Mixed Sentiment from Market Analysts

Wall Street analysts currently maintain an average rating of "Moderate Buy" on The Trade Desk's shares, with a consensus price target of $76.56. However, sentiment is divided, and several institutions have recently revised their assessments downward.

Morgan Stanley downgraded the stock to "Equal Weight," simultaneously reducing its price target to $50. In a separate move on December 20, investment firm Zevenbergen Capital decreased its stake in the company.

The market awaits the firm's fourth-quarter 2025 results, which are scheduled for release in February 2026.