San Fran is financially collapsing. Here is another example. Between 700 and 900 people in well paying jobs are being laid off. The Tech industry is in trouble—and the nation is in trouble.
“Twilio today announced that it will lay off 11% of its workforce — between 800 and 900 people across its staff of over 7,800 — as the customer engagement platform looks to rein in costs during the broader economic downturn. In a message to staff, CEO Jeff Lawson called the layoffs “wise and necessary,” blaming them partially on Twilio’s rapid growth over the last several years and “[lack of focus]” on key priorities.
Every firm will have an excuse—but the real reason is inflation and policies killing jobs and companies.
Twilio lays off 11% of its staff as it aims for profitability in 2023
Kyle Wiggers, TechCrunch, 9/14/22
Twilio today announced that it will lay off 11% of its workforce — between 800 and 900 people across its staff of over 7,800 — as the customer engagement platform looks to rein in costs during the broader economic downturn. In a message to staff, CEO Jeff Lawson called the layoffs “wise and necessary,” blaming them partially on Twilio’s rapid growth over the last several years and “[lack of focus]” on key priorities.
“I take responsibility for those decisions, as well as the difficult decision to do this layoff,” Lawson wrote in a letter sent internally and published to Twilio’s blog. “Twilio has always been a growth company. And as you know, we’re committed to being a profitable growth company. At our scale, being profitable will make us stronger … We ultimately found that some investments no longer make sense and identified areas where we can be more efficient. ”
According to Lawson, the cuts will mostly impact “areas of go-to-market,” R&D and Twilio’s general and administrative departments. Employees affected — who were notified this morning — will receive at least 12 weeks of pay, as well as one week for every year of service at Twilio, in addition to the value of Twilio’s next stock vest.
Lawson says Twilio’s talent acquisition team will create a list that laid-off employees can opt into, to be shared with other companies that may be hiring and “investors who know many such companies.”
Paperwork filed with the U.S. Securities and Exchange Commission shows that the headcount reduction will cost between $70 million to $90 million, by Twilio’s estimates, with the bulk of costs being incurred during the company’s third and fourth fiscal quarters 2022.
“Today’s layoffs are about aligning our investments more squarely with our priorities, as well as running our company more efficiently overall,” Lawson continued. “No doubt, it will be a hard few months as we change the shape of our company for the opportunity ahead.”
As CNBC notes, publicly traded, San Francisco-based Twilio has been striving for profitability in 2023. The company nearly doubled headcount during the pandemic as the appetite for its cloud services climbed. In 2021, Twilio acquired data security platform Ionic Security and toll-free messaging services provider Zipwhip — the latter for $850 million.
But sales cratered as the world returned to in-person work.
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 (Q2), 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.
