Twilio Inc. Announces Layoffs
On Monday, software provider Twilio announced that it is planning to lay off roughly 5% of its workforce due to underachievement in the growth of a unit that activist investors have targeted in their recent campaign.
Layoff Details
The layoffs are expected to impact around 300 employees and will result in restructuring charges ranging from $25 to $35 million. However, Twilio confirmed that it will uphold its guidance for the upcoming fourth quarter and the full year. The company also revealed that these cuts are part of a broader plan to streamline its offerings.
In a letter from CEO Jeff Lawson, it was mentioned that the company is looking to sunset its Programmable Video product as part of the plan to streamline its offerings. The cuts will affect Twilio’s Data & Applications unit, which is the same unit that activist investors have been urging CEO Jeff Lawson to divest.
History of Layoffs
This is not the first time that Twilio has undertaken layoffs. In fact, the company has executed three rounds of layoffs in slightly more than a year. Twilio’s CEO, Jeff Lawson, said that the decision to invest in go-to-market for Segment, a product under its data & applications group, has not led to the growth outcome they had hoped for. This unfortunate outcome has led to the decision to make these layoffs.
Activist Investors’ Stance
The activist investors are of the view that the company can cut more jobs, hoping for further management changes at Twilio. They have been vocal about pushing the company to sell its Data & Applications unit, if not the entire company. Both Anson and Legion have amassed individual stakes of around $50 million and are reportedly pushing for management changes at the company.
Market Reaction
The latest news about the layoffs had minimal impact on Twilio’s shares, as they were relatively flat on the news.
Developing Story
This story is still developing and further updates are expected. Please check back for more information.
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