News: Twilio follows Spotify with hundreds of job cuts, 5% workforce hit

Strategic HR

Twilio follows Spotify with hundreds of job cuts, 5% workforce hit

Twilio has undergone previous staff reductions, initially cutting about 11% of its workforce in September 2022, followed by an additional reduction of 17% a few months later in February of the subsequent year.
Twilio follows Spotify with hundreds of job cuts, 5% workforce hit

Shortly after Spotify's sizable layoffs, Twilio announced a substantial cut in its workforce, affecting hundreds of positions, marking a reduction of approximately 5% of the company's employees. This development underscores an ongoing trend of downsizing within the tech industry, dispelling any notion of a decline in tech layoffs.

This isn't Twilio's first staff reduction; the company previously downsized by approximately 11% in September 2022, followed by an additional 17% reduction just a few months later in February of the following year.

The rapid shrinkage of Twilio's workforce is evident. Over a year ago, the company boasted a staff count of 7,800 employees. However, as per Twilio's most recent earnings disclosure, the workforce has contracted to around 5,900, reported Techcrunch. With the latest job cuts, an estimated 300 individuals will face job loss, resulting in a projected workforce of 5,600 employees.

Initially established with a suite of application programming interfaces (APIs) facilitating programmable phone calls and text messaging, Twilio's recent expansions include significant acquisitions, such as Segment and SendGrid, broadening its product portfolio.

In an internal communication to all employees, Twilio CEO Jeff Lawson disclosed, "Last year, we made a strategic investment in go-to-market for Segment, anticipating growth. Regrettably, this hasn't yielded the anticipated results, leading to excessive spending. Consequently, we've made the challenging decision to reduce certain Segment go-to-market roles, aligning our investment with the outcomes observed."

Moreover, changes are underway in the marketing and finance sectors due to alterations in selling strategies for Flex, a cloud-based contact canter for sales and customer service teams, where numerous roles are being phased out or consolidated into the Communications division.

February saw Twilio's organisational restructuring, delineating two distinct business units: the communications division, comprising legacy elements like messaging APIs and transactional emails, and the data and applications division housing newer endeavours, including customer data platforms and engagement applications.

Twilio's recent activist pressure, notably from Anson Funds advocating for divesting or selling the data and applications division, hints that those working in this division are more susceptible to the ongoing layoffs.

Acknowledging this move, Lawson stated, "While we've witnessed commendable growth in Communications, we've encountered growth challenges in TD&A. Hence, we're refining our strategies for Flex and realigning our investments in Segment, regrettably necessitating a 5% reduction in Twilio's workforce."

Twilio's shares currently maintain a relatively stable position, although they've performed impressively in the past year, exhibiting a 46% increase since December 2022. This upturn values the company at $12 billion, though significantly below its peak share price during the 2021 tech boom.

Impacted employees will receive compensation, including 12 weeks of base pay plus additional weeks based on years of service, alongside other transitional support. Twilio anticipates expenditure between $25 to $35 million related to this workforce reduction.

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Topics: Strategic HR, #Layoffs, #HRTech, #HRCommunity

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