Twilio Layoffs: Twilio News And Twilio Stock Outlook
- Customer engagement company Twilio announced plans to cut 17% of its workforce, which is approximately 1,500 jobs
- The company is making changes to its communications and software teams, perks program and offices to maximize efficiency
- Twilio stock saw a jump in price Monday morning as analysts are hopeful the company can recover from a rocky 2022
San Francisco communications and software company Twilio announced plans to cut 17% of its staff on Monday morning. This comes just five months after another round of layoffs for the company.
In a blog post, CEO and co-founder Jeff Lawson said that despite Twilio’s “great market position and very strong cash reserves,” the company will need to take additional measures to ensure profitability in the future.
These measures include significant layoffs, splitting the company into two business units, reduced employee perks and closing some offices. Twilio is just one of many major tech companies to announce layoffs in the past few months.
We’ll go into further detail on the announcement and its effect on Twilio stock. If you’re an investor looking to expose your portfolio to new technologies without constantly checking the headlines, Q.ai is a great place to start.
Twilio announces job cuts and operations changes
The 17% reduction in Twilio’s staff, impacting roughly 1,500 of Twilio’s nearly 9,000 employees, marks the second major round of cuts for the company in the last five months. Twilio laid off 11% of its workforce in September 2022
Jeff Lawson, Twilio’s CEO and co-founder, explained the move by saying, “We have to spend less, streamline, and become more efficient.”
Making two distinct business units
Twilio is primarily a customer engagement platform that helps businesses connect to customers with text, video, voice and email through APIs. A second part of the company is dedicated to capturing and analyzing first-party customer data to grow client sales. Lawson specifically cited the differences between these two groups when explaining the job cuts.
He wrote, “the two parts of our business – communications and software – are at different lifecycle stages and have different operating needs. In Communications, we have to get more efficient. For [software], we must accelerate growth.”
Twilio plans to divide the two groups into distinct business units in hopes of better equipping each “to sprint toward their goals with more focus and independence.”
Another part of Twilio’s cost reduction plan involves dropping employee perks. Twilio will be “winding down” book and wellness allowances and phasing out Twilio Recharge. Recharge allowed employees to take a sabbatical of four consecutive weeks of paid time off every three years.
The “most impactful” benefits related to medical, retirement and the Employee Stock Purchase Program will remain unchanged.
Closing some offices
Twilio will also close some of its offices, citing “low office utilization.” Though they plan to redirect some of those expenses into a higher travel budget, allowing employees to visit each other more frequently, it will be interesting to see if these changes to Twilio’s operating policies significantly boost the company’s earnings.
Twilio shares rose over 2% Monday as investors responded positively to the news of the company’s streamlining efforts. Twilio stock has fallen roughly 68% in the last 12 months. While revenue has exceeded analyst expectations for the few most recent quarters, the company’s earnings reports have not recently been promising.
Even though revenue has been regularly increasing at Twilio, the company saw a growth percentage decline over the last year. It also saw a loss from operations of around $287 million in the most recent quarter, excluding restructuring costs and long-lived asset impairment. This is an almost $55 million increase in losses from 2021.
The job cuts and operational changes may prove effective for the company, and many analysts feel optimistic about Twilio stock going forward. Twilio will release its fourth-quarter earnings on February 15, 2023, so we’ll soon have a better idea of the company’s current financial situation.
Other tech layoffs
The tech world has seen many major layoff announcements in recent weeks. These are just a few of the most recent examples.
- Yahoo: More than 1,600 employees will likely be fired by the end of 2023 since Yahoo plans to cut its Yahoo For Business division in half .
- Disney: Hoping to save $5.5 billion in costs, Disney announced plans on February 8, 2023, to cut 7,000 jobs .
- Zoom: On February 7, 2023, video communication company Zoom announced plans to cut its workforce by 15%, laying off 1,300 employees. Zoom’s CEO has also said he’ll reduce his salary by 98% in the coming fiscal year.
- Dell: Dell is planning to cut 5% of its workforce, an estimated 6,650 jobs.
With economic uncertainty ahead, it’s unsurprising that many tech and non-tech companies are looking to cut costs. We anticipate more layoff announcements in the coming weeks.
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The bottom line
Twilio layoffs are just one of many significant layoffs we’ve seen in the tech world over the last few weeks. By cutting employees and changing parts of its operations, Twilio hopes to become profitable and see gains in its EPS in the coming year.
Investors will be watching the stock closely to see if these changes benefit Twilio’s bottom line.
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