Twilio is laying off approximately 17 percent of its workforce as part of a restructuring plan.
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According to a company filing with the SEC, the company had 8,992 employees in September 2022, so it is estimated that around 1,500 staff members are set to leave.
Twilio CEO, Jeff Lawson, told staff about the latest round of lay offs in a company-wide email earlier this year.
In the email to employees, Lawson said: “A company optimizes for its environment. For the last 15 years, we ran Twilio for growth, building a tremendous customer base, product set, and revenue base.
But environments change – and so must we. Now we have to prioritize profit far more than before. We’re exiting the last phase with a great market position, and very strong cash reserves, but unfortunately that’s not enough to get us through the next phase.
“We have to spend less, streamline, and become more efficient. To do that, we’re forming two business units: Twilio Communications and Twilio Data & Applications.
“And today, I’m unfortunately bearing the news that we’re parting ways with approximately 17% of our team.”
The restructuring plan doesn’t only include laying off staff; the company is also planning a shift to remote work and has said it will shut down some offices in the coming months.
According to Lawson, Twilio intends to maintain a “handful” of global hubs and satellite offices.
The CEO said that the company has seen low office utilisation from its employees and that it is aiming to redirect some of the cost savings into higher travel budgets to allow staff to see each other more.
On the back of his email to staff, Lawson said during the company’s fourth-quarter earnings call on Wednesday that he is “confident” of the path the company is on.
He stated: “As you may have seen, we’ve made a number of significant changes to our business that we believe opt to perform in both the short, medium and long term.
As I mentioned in my prepared remarks, we are confident that this is the right set of actions and the right path forward for our customers, for our teams, and that will enable us to create more value for our shareholders.
A Rocky Period?
The latest round of lay offs from Twilio comes just five months are the company reduced its workforce by 11 percent in September 2022.
At the time, Twilio put the major lay offs down to the need to increase the company’s profitability; however, the latest restructuring plan is about driving business outcomes, according to Khozema Shipchandler, Twilio COO.
Shipchandler commented: “If you go back to the fall and the restructuring that we did at that time, I would call that like kind of more cost cutting.
Obviously, it had the unfortunate impact of us having to part ways with about 11% of our workforce at the time.
“I would say this time around, it was more a restructuring around two different businesses that we think can drive better outcomes, both for our customers as well as our shareowners just given the different buying cycles that have economic aspects of the two different businesses.”
His comments echo Lawson’s message to employees that Twilio needs significant structural changes to execute the strategy for its communications and software branches.
Lawson says the company is aiming to be more efficient within its communications branch, and it is looking to accelerate growth for its Segment, Flex, and Engage products.
To achieve this Twilio is forming two business units, Twilio Data & Applications and Twilio Communications.
Tech Industry Lay Offs
Lay offs across the tech industry are rife at the moment, with numerous announcements from multiple organisations in recent months.
At the time of writing, 377 tech companies have laid off 107,930 staff members since the start of 2023, according to the redundancy-tracking website, layoffs.fyi.