Twilio lays off 11% of its staff to cut cost

San Francisco-based cloud communication giant Twilio will lay off 800 to 900 employees across its staff of over 7,800, approximately 11% of its headcount, to cut costs during the broader economic downturn.

In a letter to employees, Twilio CEO Jeff Lawson said the company decided to lay off staff to run more efficiently and align its investments with its priorities. He said the decision was “extremely difficult” but also “wise and necessary.”

“I take responsibility for those decisions, as well as the difficult decision to do this layoff,” Lawson wrote in a letter sent internally and published on Twilio’s blog.

“Twilio has always been a growth company. And as you know, we’re committed to being a profitable growth company. At our scale, profitability will make us stronger … We ultimately found that some investments no longer make sense and identified areas where we can be more efficient.”

Founded in 2018 by Jeff Lawson, Evan Cooke, and John Wolthuis, Twilio is a US company based in San Francisco, California, which provides programmable communication tools for making and receiving phone calls, sending and receiving text messages, and performing other communication functions using its web service APIs

Lawson said the employees impacted are in areas of the company that can operate more efficiently and where customers can “succeed without as much human intervention.”

Employees affected will receive at least 12 weeks of pay and one week for every year of service at Twilio, in addition to the value of Twilio’s next stock vest.

Lawson says Twilio’s talent acquisition team will create a list that laid-off employees can opt into, to be shared with other companies hiring and “investors who know many such companies.”

Paperwork filed with the U.S. Securities and Exchange Commission shows that the headcount reduction will cost between $70 million to $90 million, by Twilio’s estimates, with the bulk of costs being incurred during the company’s third and fourth fiscal quarters in 2022.

“Today’s layoffs are about aligning our investments more squarely with our priorities, as well as running our company more efficiently overall,” Lawson continued. “No doubt, it will be a hard few months as we change the shape of our company for the opportunity ahead.”

As CNBC notes, publicly traded, San Francisco-based Twilio has been striving for profitability in 2023. The company nearly doubled its headcount during the pandemic as the appetite for its cloud services climbed.

In 2021, Twilio acquired data security platform Ionic Security and toll-free messaging services provider Zipwhip — the latter for $850 million.

Twilio said it expects to incur between $70 million and $90 million in charges related to the restructuring plan.