Twilio Announces Layoffs Ahead Of Q4 Earnings, CEO Takes Pay Cut

Communication tools vendor Twilio has announced another round of layoffs, this time reducing 17 percent of its workforce – which should be about 1,400 employees – two days before it reports earnings for the fourth quarter of its fiscal year

Jeff Lawson, CEO and co-founder of San Francisco-based Twilio, said in an online post that the layoff is due to restructuring the company into two business units: Twilio Communications and Twilio Data & Applications.

“As we’ve refined our strategy over the past several months, it‘s become apparent we need significant structural changes to better execute our strategy,” Lawson said in the post. “This is because the two parts of our business – communications and software – are at different lifecycle stages and have different operating needs.”

[RELATED: Twilio Lays Off 11 Percent Of Workforce; CEO Says Cuts ‘Wise And Necessary’]

Twilio Layoffs, CEO Pay Cut

A Twilio spokesperson declined to comment beyond Lawson’s post but did confirm that this round of layoffs is separate from the layoffs Twilio announced in September.ADVERTISEMENT

In a filing with the U.S. Securities and Exchange Commission Monday, Twilio revealed that Lawson also cut his base salary by almost half – down to $65,535, effective March 1.

Twilio also revealed that “ it expects to report results for the fourth quarter of 2022 at or above the guidance ranges provided” in November.

Twilio will pay between $100 million and $135 million related to workforce reduction, including expenses on benefits and severance. Twilio expects to finish executing the layoffs by the end of the second quarter of this year.

The company expects to add between $10 million and $25 million in real estate closure costs.

Twilio joins a slate of other tech vendors to announce workforce reductions after a digital tools boom during the height of the pandemic. Moderated customer demand, less of a need for pandemic-era employee counts, growing inflation in the United States and the potential for a recession have been among the reasons for the layoffs.

Other vendors who have announced layoffs in recent days include ZoomDell Technologies, OktaAutodeskSplunkSecureworksCyrenMicrosoft and GitLab.

This is Twilio’s second workforce reduction in recent months. In September, Twilio said it would lay off about 11 percent of the company, about 800 employees.

In November, during the company’s latest quarterly earnings report, Twilio said it should have about 8,176 employees after the first layoff round, bringing the latest round of job cuts to about 1,400 affected employees.

A Monday report from investment firm KeyBanc put the new employee count at about 6,800 – still more than double the headcount at the end of 2019.

The KeyBanc report praised the changes. “We believe today‘s announcements will allow the Company to focus on both profit and growth overall with the two newly formed divisions likely having different KPIs (key performance indicators) going forward, in our view,” according to the report.

In September, Lawson blamed fast growth and a greater need to be profitable.

In his Monday post about the new round of layoffs, Lawson said “our current structure is slowing our progress toward” more efficiency in its communications unit and more growth in segment, flex and engage.

The communications unit had gotten too large, he said. Last year’s layoffs were done to the company as it was previously structured. This year’s layoffs take into account the reorganization, he said.

“I know many of you who are impacted,” Lawson said. “I’ve worked alongside you, and I’ve seen the amazing work you’ve done. Thank you – you’re a permanent part of Twilio and I’m sorry that we’re parting ways like this.”

Twilio Restructuring

Elena Donio will lead the new data and applications division, according to the Monday post. Khozema Shipchandler will lead the communications unit. Both units will have sales, research and development (R&D), operational resources and a level of independence, Lawson said.

Donio has been associated with Twilio for about seven years, according to her LinkedIn account. She was a board member from 2016 until May, when she became Twilio’s president of revenue.

She is also a board member of Databricks and was CEO of Axiom for about four years, according to her LinkedIn account. She worked at Concur for more than 18 years, leaving the company in 2016 as president. SAP bought Concur in 2014 for about $8 billion.

Shipchandler has been with Twilio for about four years, according to his LinkedIn account. He served as company chief financial officer until 2021, changing to company chief operating officer.

He previously worked at GE for more than 20 years, leaving the company in 2018 with the title of chief commercial officer, according to his LinkedIn account.

In its SEC filing, Twilio revealed that Aidan Viggiano will become the chief financial officer on March 1. Viggiano has been senior vice president of finance since November 2021 and worked for Twilio since 2019.

She also worked at GE previously, leaving in 2019 with a role in investor relations after more than 17 years, according to Viggiano’s LinkedIn account.

Twilio Perks Cut

Along with the layoffs, Twilio is cutting perks, including book and wellness allowances and Twilio “recharge” – which gives employees the chance for four consecutive weeks of paid time off as a sabbatical every three years. Sabbatical eligibility in 2023 will still be honored, Lawson said.

Medical, retirement and employee stock purchase benefits will stay, he said.

Twilio will also close some offices over the next few months. Some of those cost savings will go into higher travel budgets, Lawson said.

“While tremendously difficult, I believe these actions will put us on the right path for executing our strategy and creating an even stronger, more efficient, and more effective Twilio,” he said.

Twilio Q3 Earnings

Twilio’s latest quarterly earnings report was in November for the quarter ended Sept. 30.

The company reported quarterly revenue of $983 million, up 33 percent year over year. Using generally accepted account principles (GAAP), the company reported a loss from operations of $457 million, about double year over year.

The company had more than 280,000 active customer accounts as of Sept. 30, up about 10 percent year over year.

At the time, Twilio said it expected fourth quarter revenue of between $995 million and $1 billion, a year over year growth of about 18 percent. It expected a loss from operations between $5 million and $15 million not using GAAP.

Twilio’s fourth quarter earnings report is scheduled for Wednesday. Its stock was $61.91 a share Monday afternoon, up about 3 percent from Friday close.LEARN MORE: Collaboration & Communication  | VOIP and Unified Communications  | Cloud Platforms  | Cloud Software 

 Learn About Wade Tyler Millward


Wade Tyler Millward is an associate editor covering cloud computing and the channel partner programs of Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud vendors. He can be reached at [email protected].


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