Cloud communications company Twilio is planning to reduce its workforce by 5%, marking its third significant reduction in staff numbers.
Twilio is making cuts mainly in the sales teams for its consumer data and contact center software. The company has let go of more than 3,000 employees since September 2022, cutting down about a third of their total staff from that time.
“Last year, we set out on a path to reorient our business toward profitable growth,” said company spokesperson Kari Ramirez. “Specifically, we streamlined our more mature, scaled Communications business to focus on efficiency and profit, and we organized our Technology, Data and Analytics (TD&A) business to optimize for growth. We’ve made tremendous progress in Communications, even overachieving on our goals; however, we’ve underachieved on growth in TD&A.”
The restructuring mainly impacts the sales teams of Twilio's consumer data platform and contact center software, according to a memo from CEO Jeff Lawson that was released Monday as part of an SEC filing. Lawson also noted that earlier reorganizations fell short of accelerating the growth of these particular divisions.
According to the memo, employees impacted by this change will be given a severance package that includes 12 weeks of their basic salary plus an additional week's pay for each year they have worked at the company. They will also receive other forms of support to assist with the transition. In relation to these workforce reductions, Twilio anticipates incurring expenses ranging from $25 to $35 million.
The company did not give a specific number for how many people it will lay off in the latest round of cuts, but judging from the size of its workforce before it began layoffs last year, 5% of its current staff would be between 300 and 400 workers.
Twilio's stock dropped by 1.1% in early trading on Monday. The company has faced challenges sustaining its previously robust revenue growth and investor enthusiasm. Twilio has also revealed plans to introduce new artificial intelligence products for its marketing services.
The layoffs at Twilio are the latest in a grim year for tech workers. Data gathered by Layoffs.fyi, an online platform that monitors employment reductions in the tech industry, shows that 1,119 tech firms have dismissed approximately 248,974 employees this year, a figure nearly matching the 249,611 layoffs recorded last year. Recently, Amazon verified its plans to dismiss several hundred employees from its Alexa division, aligning with a strategic shift towards prioritizing generative AI.