Twilio has just announced a significant cut in its workforce, affecting about 5% of its employees.
This isn’t the first time Twilio has had to make such a tough decision. In September 2022, they reduced staff by around 11%, and a few months later in February of this year, another 17% of the workforce was laid off. The company’s employee count has rapidly decreased from 7,800 a little over a year ago to 5,600 after today’s announcement.
Twilio, originally known for its APIs enabling programmable phone calls and text messages, has evolved through major acquisitions, including Segment and SendGrid. However, CEO Jeff Lawson admitted in an email to employees that the investment in go-to-market for Segment didn’t yield the expected growth. Consequently, roles related to Segment and Flex (a cloud-based contact center) will be impacted.
In response to activist pressure, notably from Anson Funds advocating for a sale or divestment of the data and applications division, Twilio restructured into two business units earlier this year. The communications division covers legacy services like messaging APIs and transactional emails, while the data and applications division focuses on newer ventures such as customer data platforms and engagement applications.
Twilio’s shares have remained relatively steady, though there’s been a notable 46% increase over the past year, valuing the company at $12 billion. Despite this, the stock is still down 85% from its peak during the 2021 tech boom. Lawson acknowledged the changing landscape of the tech industry, suggesting that reaching those peak valuations might be challenging in the near future.
Employees affected by the layoffs will receive a severance package, including 12 weeks of base pay and an additional week for each year of service. Twilio anticipates spending $25 to $35 million in charges related to this workforce reduction.
