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Twilio Lays Off 11 Percent Of Workforce; CEO Says Cuts ‘Wise And Necessary’

Mark Haranas

“I’m not going to sugarcoat things. A layoff is the last thing we want to do, but I believe it’s wise and necessary,” said Twilio CEO Jeff Lawson in a letter to employees.

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Twilio CEO Jeff Lawson today said it’s a “wise and necessary” move to lay off approximately 11 percent of its employees due to cloud communications company growing “too fast.”

“We’ve made the extremely difficult decision to restructure and reduce Twilio’s workforce by approximately 11 percent [of] teammates and friends who helped build Twilio,” said Lawson in a message to Twilio employees, according to a filing with the U.S. Securities and Exchange Commission.

“I’m not going to sugarcoat things. A layoff is the last thing we want to do, but I believe it’s wise and necessary,” said Lawson. “Twilio has grown at an astonishing rate over the past couple years. It was too fast, and without enough focus on our most important company priorities. I take responsibility for those decisions, as well as the difficult decision to do this layoff.”

[Related: SAP To Raise Support Prices In 2023 Due To Inflation]

Around 800 To 900 Twilio Employees To Be Fired

Twilio is expected to lay off somewhere between 800 to 900 employees based on its total workforce headcount of 7,860 as of the start of 2022.

The cuts will impact Twilio teams in research and development, go-to-market and the company’s administrative and general departments.

In a regulatory filing, Twilio said it expects that it will incur approximately $70 million to $90 million in charges in connection with the restructuring plan, “consisting of cash expenditures for employee transition, notice period and severance payments, employee benefits, and related facilitation costs as well as non-cash expenditures related to vesting of share-based awards.”

The San Francisco-based customer engagement platform company has a market cap of $14.23 billion.

Compared to one year ago, Twilio’s stock is down 76 percent, trading around $78 per share as of Wednesday.

CEO: Why Twilio Is Firing Roughly 850 Employees

Twilio has nearly doubled its employee headcount over the past several years, while also acquiring several companies.

Last year, Twilio spent hundreds of millions acquiring messaging services specialist Zipwhip as well as data security company Ionic Security.

Twilio’s CEO said the company is committed to being profitable.

“At our scale, being profitable will make us stronger. It requires us to ask more rigorously which activities and investments are working. It forces us to ask where we have good alignment internally to amplify each of our efforts. This discipline requires us to ask if our investments are getting us where we need to go,” Lawson said.

For its recent second fiscal quarter, Twilio generated $943 million in total sales, up 41 percent year over year. However, the company reported a net loss of nearly $312 million in the quarter.

Lawson said Twilio has four priorities for reaching profitability and leading in customer engagement: investing in its platform reliability and trust; increasing the profitability of messaging; accelerating Segment adoption, and scaling its Flex customer base.

“I take responsibility for choosing to grow our team faster and to pursue many priorities beyond these four priorities over the recent years. And now, I also own the decision to become more focused, resulting in this layoff,” he said. “Today’s layoffs are about aligning our investments more squarely with our priorities, as well as running our company more efficiently overall.”

CEO To Employees: It’s OK To ‘Feel Sad’ And ‘Shocked’

Lawson added that he was “deeply sorry” to have to let go of his Twilio employees.

“I want to do our best to take care of you in this transition and set you up for success in what comes next. All impacted Twilions globally will receive at least 12 weeks of pay, plus one week for every year of service at Twilio,” he said.

“Today, it’s okay to be a bit shocked and feel sad. And to support your colleagues,” he said. “I am confident that we’ll look back at this as a difficult time but one that set up Twilio well for the future.”

Mark Haranas

Mark Haranas is an assistant news editor and longtime journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks with world-renown CEOs and IT experts as well as covering breaking news and live events while also managing several CRN reporters. He can be reached at mharanas@thechannelcompany.com.

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