As the customer interaction platform strives to control expenses during the general economic slump, Twilio today revealed that it will lay off between 800 and 900 employees, or 11% of its workforce. CEO Jeff Lawson described the layoffs in a statement to the workforce, attributing in part to them Twilio’s explosive expansion over the past several years.
Lawson asserts that the cuts will primarily affect R&D, Twilio’s general and administrative divisions. The impacted employees, who were informed this morning, will get at least 12 weeks’ pay in addition to one week for each year of employment with Twilio and the value of Twilio’s upcoming shares vest.
According to Lawson, Twilio’s talent acquisition team would compile a list that terminated workers can choose to join and share with other businesses that could be hiring as well as “investors who know many such businesses.”
According to paperwork submitted to the U.S. Securities and Exchange Commission, Twilio predicts that the staff reduction will cost between $70 million and $90 million, with the majority of expenses occurring in the third and fourth fiscal quarters of the business in 2022.
Twilio, a publicly traded company situated in San Francisco, has been aiming for profitability by 2023, according to CNBC. As demand for its cloud services increased during the epidemic, the company’s headcount nearly doubled. Twilio purchased Zipwhip, a toll-free messaging service provider, for $850 million in 2021, and the data security platform Ionic Security.
But as people began to work in person again, sales plummeted.
Twilio’s Q2 2022 sales growth was 41%, the lowest since the December quarter in 2017, as the company faced a cyberattack that compromised the data of more than 100 customers. In its most recent fiscal quarter, Twilio – while exceeding Wall Street’s expectations – reported a loss of $322.8 million on $943.4 million in revenue.
Shares were up about 1% on news of the layoffs; Twilio’s stock has fallen about 73% this year.