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Communications software company Twilio Inc. reported fiscal second-quarter revenue and net income that topped EPS and revenue estimates in Q2, however
[See the full post at: Twilio Spooks Investors with Lightest Quarter of Growth in Over Five Years]Twilio to Lay Off 17% of Staff in Second Round of Cuts
Twilio Inc. said it is laying off about 17% of its employees, its second round of job cuts in about five months, and reducing certain employee perks as the cloud-communications company moves to prioritize profit over growth.
Chief Executive Jeff Lawson said Monday that the company is reorganizing into two business units: Twilio Communications and Twilio Data & Applications. Khozema Shipchandler, the current chief operating officer, will serve as head of the new communications unit, while Elena Donio, president of revenue, will head up the Data & Applications business.
Mr. Lawson said the communications business grew too big and needs to become more efficient, while other areas need to accelerate growth. The overall company grew rapidly during the pandemic. Twilio had 8,992 employees on Sept. 30, 2022, before the impact from its first round of layoffs, up from 3,060 employees on March 31, 2020, according to regulatory filings.
“For the last 15 years, we ran Twilio for growth, building a tremendous customer base, product set, and revenue base,” Mr. Lawson said in a memo to employees. “But environments change—and so must we. Now we have to prioritize profit far more than before.”
Twilio joins a wave of companies across technology and other sectors that are laying off workers and cutting costs amid concerns around slowing growth and broader economic uncertainty. Last week, Zoom Video Communications Inc. said it was laying off 1,300 employees, or 15% of its staff, and cutting Chief Executive Eric Yuan ‘s salary.
In a securities filing, Twilio said it was slashing Mr. Lawson’s base salary of $134,000 roughly in half, at his request. The company also named Aidan Viggiano, a former General Electric Co. executive, as chief financial officer. She has held finance roles at Twilio since 2019.
Mr. Lawson said Twilio is winding down certain perks, including an employee allowance for books and wellness. The company is also sunsetting its Twilio Recharge program, which allows employees to apply for a month-long paid sabbatical every three years.
The company will also close some offices as Twilio pursues a remote-work culture. The company will redirect some cost savings toward higher travel budgets, Mr. Lawson said.
The company expects to book about $100 million to $135 million in charges tied to the latest round of layoffs. Last year, the company moved to close some offices, which resulted in an impairment loss of $97.7 million and roughly $7 million to $10 million expected to be booked in the first quarter of 2023. The latest round of closures is expected to add $10 million to $25 million in impairments this year.
It is the second round of layoffs for Twilio, which cut 11% of its workforce in September, saying at the time that the business had grown too quickly.
The first round of layoffs was meant to streamline the company as it was then structured, Mr. Lawson said, and more are now needed to position Twilio for success as it restructures.
Shares rose 2% to $61.29 in morning trading.
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