Twilio more than decimates staff, CEO says it grew too fast
As Patreon ditches nearly a fifth of its workforce
Twilio has announced a restructuring effort that will end in an 11 percent cut of its workforce.
In an SEC filing, the communication services provider said it was acting "to reduce operating costs, improve operating margins, and shift the company's selling capacity to accelerate software sales." The San Francisco-based biz expects the more-than-decimation plan to cost it between $70 and $90 million.
In a letter to employees filed with the SEC and sent to "Twilions" earlier today, Twilio CEO Jeff Lawson said the layoffs come largely as a result of the company growing too fast and becoming bloated, losing its focus on its priorities, and considering whether or not its "investments are getting us where we need to go."
"Today's layoffs are about aligning our investments more squarely with our priorities, as well as running our company more efficiently overall," Lawson said.
Per the email, the cuts are mainly centered around research and development, administration, and go-to-market, "where customers can succeed without as much human intervention," Lawson said.
2022 hasn't been a smooth year for Twilio, with several incidents that have sliced the company's reputation: some of its workers were allegedly caught using business knowledge to commit insider trades, its private GitHub repositories were compromised and cloned, and cybercriminals successfully phished some of its employees in a wider attack on tech outfits.
Twilio was further caught up in the post-pandemic growth stock crash that saw it and other companies that grew rapidly during the shift to remote work lose a lot of value. At its peak in February 2021, Twilio's stock stood at $435.29 apiece; as of writing it's down to $79.
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"Twilio has grown at an astonishing rate over the past couple years. It was too fast, and without enough focus on our most important company priorities. I take responsibility for those decisions, as well as the difficult decision to do this layoff," Lawson said in his letter.
As has been the case in many other tech layoffs recently, affected Twilio employees will still be paid for a time. In this case, Twilio will give all employees globally 12 weeks of pay, plus one additional week for every year at the company. Twilio employees are also paid in stock, and will receive the full value of the company's next stock vest.
As of June 2022, Twilio had 8,510 employees, 936 of whom would lose their jobs. Since the layoff announcement this morning, and as of writing, Twilio stock has risen 12 percent. ®
Speaking of layoffs... Patreon, which collects subscriptions for content makers, has axed 17 percent of its workforce. The biz, which was valued at $4 billion last year, will lay off 80 members of its Operations, Finance, People, and Go-to-Market teams, as well as closing its Berlin, Germany, and Dublin, Ireland, offices.
This comes after Patreon separately laid off its five-strong security team last week.