Twilio has just announced that it will carry out a round of layoffs that will affect around 17% of its global workforce. The company will also restructure its internal organization and create two business units: Twilio Communications and Twilio Data & Applications.
Today’s news should be particularly difficult for Twilio employees, as the company already conducted a round of layoffs in September 2022. At that time, the company announced that it would lay off 11% of its staff.
According to Twilio latest earnings releasethe company had 8,992 employees as of September 30, 2022 and expected to lay off 816 employees for the 2022 round of layoffs. According to these figures, around 1,400 people will be affected by layoffs this year.
“We have to spend less, optimize and become more efficient. To do this, we are forming two business units: Twilio Communications and Twilio Data & Applications. And today, sadly, I have news that we have parted ways with approximately 17% of our team,” said Twilio co-founder and CEO Jeff Lawson. wrote in an email sent to all Twilio employees.
While Twilio started with application programming interfaces (APIs) that let you send and receive phone calls and text messages, the company has expanded its product portfolio through various acquisitions and product developments. For example, Twilio acquired Segment to go deeper into marketing data and customer engagement services in general. According to the company’s CEO, these products have not reached the same level of maturity.
“In Communications, we have to be more efficient. For Segment, Flex and Engage, we must accelerate growth. These are distinctly different tasks for our teams, and our current structure is slowing our progress toward these two goals, which are critical to our growth, our profits, and our Customer Engagement Platform ambitions,” Lawson wrote.
Each business unit will have its own president: Elena Donio for Data and Applications, and Khozema Shipchandler for Communications. Each division will also have its own sales, R&D, and administration resources. With this clear line, it becomes easier to carry out different strategies for each part of the business.
The communications side of the business appears to be particularly affected by today’s layoffs. “When we look at these two business units separately, it’s clear that we’ve gotten too big, especially in Communications. And that is why we are also laying off some colleagues today,” Lawson wrote.
Affected employees will receive 12 weeks of base pay plus one week for each year of service, as well as medical coverage and career resources. The company is also finalizing some benefits, such as book and wellness allowances, as well as Twilio Recharge, a four-week paid sabbatical that employees would get every three years.
“We also decided to cancel Twilio Recharge, which I believe, but which (in hindsight) was ill-timed given our profitability goals,” Lawson wrote.
Paperwork archived with the US Securities and Exchange Commission shows that the board will reduce Jeff Lawson’s annual base salary from $134,000 per year to $65,535. Twilio expects to spend $100 million to $135 million in charges related to the reduction in the workforce. There will be additional costs associated with office closures.
twilio shares they are currently trading 2.8% higher compared to Friday’s closing price. The company is going to announce its fourth quarter earnings in a couple of days.
