Twilio Cuts Jobs Following Activist Pressure, Continuing Tech Layoffs Trend


In a move that reflects the ongoing wave of tech layoffs, Twilio, the cloud communications platform, has announced another round of job cuts, affecting approximately 5% of its workforce. The decision comes hot on the heels of Spotify’s recent announcement of significant layoffs.

Key Takeaway

Twilio, the cloud communications platform, has announced another round of layoffs, affecting approximately 5% of its workforce. This follows previous job cuts of 11% and 17% in September 2022 and February 2023, respectively. The company’s workforce has significantly decreased within a short span. Twilio currently employs around 5,900 people, and with the latest job cuts, approximately 300 employees will be impacted.

This is not the first time that Twilio has resorted to job cuts, as the company had already reduced its staff by 11% in September 2022, followed by another 17% reduction in February of this year. The pace at which Twilio’s workforce is shrinking is concerning, given that it had 7,800 employees just over a year ago. According to the most recent earnings release, Twilio currently employs around 5,900 people, with the latest job cuts resulting in a further 300 job losses and bringing the total headcount to 5,600.

Twilio’s Expansion and Challenges

Originally known for its set of application programming interfaces (APIs) for sending and receiving phone calls and text messages, Twilio has expanded its product portfolio through several significant acquisitions. The purchases of Segment and SendGrid, for instance, have fueled the company’s growth. However, Twilio CEO Jeff Lawson acknowledged that the investment in go-to-market for Segment did not yield the expected results, leading to excessive spending. Consequently, roles related to Segment’s go-to-market strategy will be eliminated to align the investment with the desired outcomes. Changes will also be made to the sales approach for Flex, Twilio’s cloud-based contact center solution.

Two Separate Business Units

In the beginning of this year, Twilio underwent a restructuring, establishing two separate business units. The communications division incorporates the legacy components of Twilio’s messaging APIs and transactional emails, while the data and applications division focuses on newer initiatives, such as customer data platforms and engagement applications. As a result, the data and applications division, which faces activist pressure, is more likely to be impacted by the current round of job cuts.

Impact and Financials

While Twilio shares have remained relatively flat recently, the overall performance has been positive over the past year, with a 46% increase since December 2022. However, Twilio is still far from reaching its peak share price of $443.49 during the 2021 tech boom. The company’s market value currently stands at $12 billion.

Affected employees will receive a severance package consisting of 12 weeks of base pay plus an additional week for each year of service, along with other transitional support. Twilio anticipates charges related to the workforce reduction amounting to $25 to $35 million.

Leave a Reply

Your email address will not be published. Required fields are marked *