In a shocking announcement, Twilio has declared it will be cutting almost 17% of its global staff and restructuring the organization into two distinct divisions: Twilio Communications and Data & Applications. In order to remain competitive in today’s rapidly changing landscape, this decision was believed to be necessary for the continued success of the company.
This news must be particularly disheartening for Twilio employees, considering the company already experienced a layoff round in September of 2022. The organization declared that 11% of their personnel would be dismissed then.
As per Twilio’s latest financial report, the company had 8,992 team members as of September 30th this year and is predicted to let go 816 personnel for their 2022 layoffs. It appears that approximately 1,400 people will be affected by these cuts in 2021.
As we strive to save resources, streamline operations, and maximize efficiency throughout the organization, Twilio will be forming two separate business units: Twilio Communications and Twilio Data; Applications. Regrettably, I must inform you that this process necessitates layoffs for roughly 17% of our team – a heartbreaking yet crucial decision during these turbulent times.
Twilio began with APIs that let you send and receive phone calls and text messages, but their product portfolio expanded substantially through various purchases and innovations. For example, they acquired Segment to advance further into marketing data analytics as well as customer engagement services in general. And although these products have not achieved the same level of success yet, according to Twilio’s CEO, it is only a matter of time before they do so.
As Lawson stated, we need to up our efficiency in Communications and bolster the growth of segments such as Flex and Engage. While these objectives may appear distinct at first glance, they are directly tied to our profit gains, customer engagement platform ambitions and overall growth. However, if our current organization remains unchanged it will impede us from achieving these goals which are essential for success.
To foster individualized strategies, the business is dividing into two sections: Data & Applications with President Elena Donio overseeing, and Communications directed by Khozema Shipchandler. In addition to their own exclusive sales, research and development teams; each division will have independent admin resources for maximized success!
Today’s layoffs have severely impacted the Communications part of our business. After carefully evaluating both business units independently, it became clear that we had become far too large in this area specifically. As a result, several colleagues are unfortunately having to be released from their positions as well. Lawson further elaborated on this decision in writing.
Affected employees will be rewarded with 12 weeks of base salary plus one week for every year at the company, comprehensive health coverage and career guidance. Unfortunately, some benefits like book and wellness allowances along with Twilio Recharge — a four-week paid sabbatical that was granted to staff members each three years – have been cancelled.
After careful consideration, we have chosen to sunset Twilio Recharge. Though it was a concept I believe in and still think is important, unfortunately the timing was not conducive to reaching our profitability goals.
According to documents filed by the U.S. Securities and Exchange Commission, Jeff Lawson’s annual salary will be drastically reduced from $134,000 per year to just $65,535 annually. The workforce reduction is expected to cost Twilio anywhere between $100 million -$135 million in charges, plus additional costs involved with office closure operations.
At the moment, Twilio shares have surged by 2.8% compared to their closing value on Friday. In only a few days’ time, they will release their fourth-quarter earnings report – it’s sure to be an exciting watch!