Twilio Plans to Cut 17 Percent of Staff in 2nd Wave of Layoffs

Twilio Inc. founder and CEO Jeff Lawson (C, wearing glasses) reacts after ringing the opening bell to celebrate Twilio's initial public offering at the New York Stock Exchange on June 23, 2016. (Drew Angerer/Getty Images)

Twilio, a cloud-communications software maker, says it’s laying off about 17 percent of its overall workforce, according to a company blog post.

CEO Jeff Lawson wrote that the latest round of job cuts is necessary to reorganize the tech firm; he acknowledged that while “these changes hurt,” they are needed to ensure the business is successful.

The latest round of layoffs might affect about 1,500 employees, based on about 8,992 employees that the company said it had in September 2022.

“It is painful to part ways with so many talented people—but it’s necessary to get our two businesses into the right shape to succeed,” he wrote.

“The weeks ahead will be about processing all this change and working together to acclimate to our new structure,” he added. “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.”

In addition, the executive noted that Twilio is closing some offices and will establish two business units—Twilio Data & Applications and Twilio Communications—to become more efficient and operate within its budget constraints.

In September, the software builder confirmed in a Securities and Exchange Commission (SEC) filing that it would lay off 11 percent of its workforce as part of restructuring efforts.

Twilio shares climbed about 2.1 percent to close at $61.32 on Feb. 13.

Tech Layoffs Continue

Last year’s trend of tech companies laying off significant numbers of their workforces has continued into 2023, with some of the biggest names in the industry terminating hundreds or thousands of employees.

The latest was Yahoo, which laid off 1,600 workers, or 20 percent of its personnel. CEO Jim Lanzone noted on Feb. 9 that the decision was made in response to strategic adjustments rather than financial challenges.

Last week, Zoom announced on its website that it was eliminating 1,300 workers, or 15 percent of its staff, which will impact every layer of the business. The layoffs were the result of adapting to the “uncertainty of the global economy.”

“We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes,” CEO Eric Yuan said. “We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities.”

Laid-off Zoom staffers will receive up to 16 weeks of salary and health care coverage, while the CEO plans to slash his salary for the coming fiscal year by 98 percent and reject his 2023 bonus.

“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today–and I want to show accountability not just in words but in my own actions,” Yuan wrote.

Dell revealed in an SEC filing that it was reducing its payroll by 6,650 positions, representing 5 percent of its total workforce.

Jeff Clarke, the co-chief operating officer, told employees in a memo that the purpose was to “stay ahead of downturn impacts.” In addition to firing employees, Dell will suspend external hiring, decrease external services spending, and limit travel, he added.

“Unfortunately, with changes like this, some members of our team will be leaving the company. There is no tougher decision, but one we had to make for our long-term health and success,” Clarke said.

“We will be ready when the market rebounds.”

So far this year, many others have confirmed they would trim workforce numbers, including Alphabet, Amazon, Facebook parent company Meta, Microsoft, Salesforce, and Twitter.

In January, U.S.-based employers announced 102,930 job cuts, the highest number since September 2020. It was also the highest January total since 2009. The technology sector led the way, accounting for 41 percent of all cuts with 41,829. This was the second highest on record.

“We’re now on the other side of the hiring frenzy of the pandemic years,” Andrew Challenger, a labor expert and senior vice president of Challenger, Gray & Christmas Inc., said in a report. “Companies are preparing for an economic slowdown, cutting workers, and slowing hiring.”

Despite what seems like a downward trend in the tech sector, Jim Herbert, chief research officer at CompTIA, suggests that the industry appears to be hiring more than firing.

“Another wave of positive tech employment data speaks to the many moving parts of a complex labor market,” he said. “Despite the layoffs, there continue to be more employers hiring tech talent than shedding it.”

Citing December job numbers from the Bureau of Labor Statistics, the firm estimates that the tech unemployment rate is hovering around 2 percent.