Twilio, a cloud communications platform, has announced another round of layoffs– according to a report by CNBC, affecting approximately 5% of its workforce. This follows the company’s previous job cuts, with around 11% in September 2022 and an additional 17% in February of the following year. The recent layoffs come amid activist pressure, with Anson Funds suggesting that Twilio should either sell the entire company or divest its data and applications division.
Twilio CEO Jeff Lawson attributed the decision to eliminate some roles to the company’s investment in go-to-market for Segment, an acquisition made the previous year. Despite the restructuring and the creation of two separate business units, Twilio has faced challenges in achieving growth in its data and applications division.
Lawson mentioned that the company is consolidating its go-to-market strategy for Flex, a cloud-based contact center, and making changes to its sales approach. The affected employees, approximately 300 individuals, will receive a compensation package, including 12 weeks of base pay plus an additional week for each year of service. Twilio anticipates spending $25 to $35 million in charges related to the workforce reduction.
Despite the layoffs, Twilio’s shares have performed well in the past year, showing a 46% increase compared to December 2022. The company currently has a valuation of $12 billion, although it remains below its peak share price during the 2021 tech boom. The tech industry’s landscape has shifted, and reaching previous high valuations may be challenging in the current environment.