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Twilio announces 11% cut to workforce, cites profitability concerns

CEO Jeff Lawson emailed all employees on Wednesday to announce the decision, which affects departments globally

A telephoto shot of Jeff Lawson, the Twilio CEO, speaking at a conference against a blue background

Cloud communications platform Twilio has announced that 11% of its workforce will be cut, in a bid to improve company efficiency and raise profits.

The company made the announcement shortly after CEO Jeff Lawson sent an email to all employees warning them of the decision, with the email text copied out in a blog post in full. Improved focus and a re-examination of priorities to improve the profitability of investments were given as the primary reason for the layoff.

Those workers in the US impacted by the decision were notified within an hour of receiving the initial announcement email and given a meeting with their team leader or a human resource business partner. In Twilio’s other regions, employees were told they would receive an email within two hours of the announcement if they were included in the cut.

CNBC reports that Twilio had 7,867 employees at the end of 2021, and if similar numbers are employed by the company today some 865 employees will have been made redundant.

“We’ve made the extremely difficult decision to restructure and reduce Twilio’s workforce by approximately 11% – teammates and friends who helped build Twilio,” stated Jeff Lawson, Twilio CEO. 

“I'm not going to sugarcoat things. A layoff is the last thing we want to do, but I believe it's wise and necessary. 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.”

Affected employees will remain on the company payroll while they search for a new job, and receive at least 12 weeks of pay, plus a week for each year that they have worked for the company. Twilio has also committed to making a list of fired employees that can be shared with firms that are hiring and promises that it will attempt to “minimize” disruption for employees on sponsored work visas.

The move comes amidst a wide shift in the hiring speed and practices amongst big tech companies as countries experience cost of living crises of varying severity. In May, buy now pay later firm Klarna said that it would cut approximately 10% of its workforce, explaining that in 2022, it anticipated its budgeting was “a very different world than the one we have today.”

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Additionally, tech giants such as Microsoft have indicated that they will change hiring practices in line with global economic headwinds, and reportedly Oracle is cutting jobs and internally reorganising. Google has reportedly cancelled its Pixelbook range and transferred the team that had been working on it, to reduce costs.

Counterintuitively, the economic uncertainty and reduction of staff across big names in tech could prove highly beneficial for small and medium-sized businesses (SMBs) in the sector, which are faced with the unique hiring opportunity of talented employees leaving larger firms in increasing volume.

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