Twilio to cut 11% of staff after 'rigorous selection process'

Twilio is laying off about 11% of its employees. The company has offices in 20 countries outside of the US including Singapore, Australia and India. Twilio declined to comment on its Asia Pacific operations. According to CNBC, Twilio had 7,867 employees as of 31 December last year. Meanwhile, the company said in an SEC filing that it expects to incur about US$70 to US$90 million in charges in connection with the restructuring plan. Of this amount, US$55 million to US$70 million is expected to result in future cash outlays.

Co-founder and CEO Jeff Lawson said in an SEC filing that it applied "a rigorous selection process" for the impacted roles to examine which were most tightly aligned to its four priorities. They are investing in Twilio's platform reliability and trust, increasing the profitability of messaging, accelerating Segment adoption, and scaling the Flex customer base. "Today’s layoffs are about aligning our investments more squarely with our priorities, as well as running our company more efficiently overall," Lawson said.

Twilio also looked at the size of the investments the company has made and whether they are working for the company. Ultimately, it found that some investments no longer make sense and identified areas where Twilio can be more efficient.

"We have curtailed our investment in areas of go-to=market where customers can succeed without as much human intervention, as well as making targeted changes to be more efficient in areas of R&D and G&A," he explained. Employees in the US and in most regions will be able to remain on company payroll while searching for their next role, whether it be inside or outside Twilio. 

Twilio expects that most of the restructuring charges will be incurred in the third quarter of 2022 and that the execution of this restructuring plan, including cash payments, will be substantially complete by the end of the fourth quarter of 2022.

"Twilio has grown at an astonishing rate over the past couple of years. 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," Lawson added.

During the second quarter of the year ended 30 June, the customer engagement platform posted US$943 million in revenue and 41% year-over-year growth. Lawson previously said that based on its results and what it is currently seeing, the company remained confident in its growth trajectory.

Twilio posted GAAP loss from operations of US$311.9 million for the second quarter of 2022, compared with GAAP loss from operations of US$202.3 million for the second quarter of 2021. Meanwhile, non-GAAP loss for the period was US$7.3 million compared to US$4.2 million during the same period last year. Twilio joins other firms globally including foodpanda, Pomelo, Shopee, Garena, HappyFresh, and even Netflix to be axing employee count as economic challenges mount.

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