Cloud communications provider Twilio Inc. today disclosed that it’s laying off 11% of its workforce as part of a restructuring plan designed to reduce costs.

Twilio provides cloud services that software developers use to embed messaging and videoconferencing features into their applications. Over recent years, the company has also expanded into other markets. Twilio in 2020 spent $3.2 billion to acquire Segment Inc., the developer of a data analytics platform that helps enterprises deliver more relevant ads to customers.

Twilio didn’t disclose the exact number of employees affected by the layoffs. The company had 7,867 employees at the end of 2021.

In a regulatory filing, Twilio stated that the layoffs are set to incur between $70 million and $90 million in charges. The company expects the majority of the charges to be incurred in its current quarter. According to the filing, the implementation of the restructuring plan will be “substantially complete” by year’s end.

Twilio co-founder and Chief Executive Officer Jeff Lawson wrote in a letter to employees that the layoffs affect the company’s research and development and general and administrative business units. The executive added that Twilio also “curtailed our investment in areas of Go To Market where customers can succeed without as much human intervention.”

Twilio’s revenue grew 41% last quarter, but its net loss increased from $227.9 million a year earlier to $322.8 million. The company last August stated that it was hoping to become profitable in 2023. 

“Twilio has always been a growth company,” Lawson wrote in his letter to Twilio employees. “And as you know, we’re committed to being a profitable growth company. At our scale, being profitable will make us stronger. It requires us to ask more rigorously which activities and investments are working. It forces us to ask where we have good alignment internally to amplify each of our efforts.”

Lawson detailed that Twilio has set four core priorities as part of its efforts to become profitable. The company is working to increase platform reliability and trust, improve the profitability of its messaging products and accelerate the adoption of the Segment data analytics platform. Twilio’s fourth core priority is increasing the number of customers using its Flex contact center management platform.   

“Twilio has grown at an astonishing rate over the past couple years,” Lawson wrote in the letter. “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.”

Twilio will provide at least 12 weeks of pay to employees impacted by the layoffs, as well as one additional week of pay for every year they spent at the company. Affected employees will also receive the full value of Twilio’s next stock vest along with outplacement support.

Photo: Twilio

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