Twilio lays off 11% of workforce

CEO blames growth rate: 'It was too fast'

Twilio lays off 11% of workforce

Twilio has joined the growing list of American employers reducing headcount ahead of an anticipated recession.

The San Francisco-based company will lay off 11% of its workforce as part of a major restructuring plan, according to an SEC filing published on Wednesday.

In a letter to employees, Twilio CEO Jeff Lawson said the cloud communications software builder decided to lay off staff in order to run more efficiently and to align the company’s investments with its priorities.

Read more: How HR leaders should manage layoffs ahead of recession

“Twilio has grown at an astonishing rate over the past couple years. It was too fast, and without enough focus on our most important company priorities,” Lawson said in the letter. “I take responsibility for those decisions, as well as the difficult decision to do this layoff.”

According to Lawson, the company has curtailed investment in areas of go-to-market “where customers can succeed without as much human intervention.” Diversity, equity and inclusion (DEI) also influenced the decision of who to let go. “Layoffs like this can have a more pronounced impact on marginalized communities, so we were particularly focused on ensuring our layoffs – while a business necessity today – were carried out through an anti-racist/anti-oppression lens,” Lawson said.

All laid off employees will receive at least 12 weeks of pay, plus one week for every year of service at Twilio, Lawson said. They’ll also receive the full value of Twilio’s next stock vest. For employees relying upon company-sponsored visas, Lawson said they’ll receive even more support to “hopefully minimize the disruption” as they work through their immigration status.

As of Dec. 31, 2021, Twilio had 7,867 employees, CNBC reported.

Twilio’s job cuts come on the heels of Patreon laying off 17% of its workforce, CEO Jack Conte announced on Patreon’s Blog. In addition, the San Francisco-based tech firm is reducing the size of its operations, recruiting and other internal support functions. As a result, Patreon is closing its Berlin and Dublin offices, offering its nine Dublin engineering employees relocation packages to join their colleagues in the United States.

Ahead of an anticipated recession, three out of four (78%) American workers are fearful they will lose their jobs, according to a survey from Insight Global, a national staffing services company. Meanwhile, 56% of American workers say they don't feel financially prepared for a recession or they don't know how they would prepare for a recession. More than half (54%) would be willing to take a pay cut, even with inflation at a 40-year high, to avoid being laid off if there were a recession.

“It's unfortunate we're already seeing some companies turn to mass layoffs because I believe layoffs should be the absolute last resort,” said Bert Bean, CEO of Insight Global. “Instead, I encourage leaders to consider other solutions, such as building a plan that avoids layoffs and helps you grow through a recession. Get your employee base executing on that, because when you bounce back from a recession, you'll need your people more than ever.”

Of course, HR leaders who experienced the global recession of 2008-2009 are better positioned to weather this potential storm. They’ve learned what works and business leaders will be turning to them to take the helm. As for HR professionals who are about to enter uncharted territory, this will be trial by fire.

“You never know how long these scenarios will last,” Jaemi Taylor, managing director in the HR practice of Allegis Partners, told HRD. Before joining the New York City-based executive search firm, Taylor spent nearly 20 years recruiting HR leaders, having worked for Robert Half, Beacon Hill and ChapmanCG.

“I’ve worked with HR leaders during COVID who asked the CEO or the board for more time, whether that’s a quarter or a month, before making drastic cuts,” Taylor says. “You want to review critical hiring, determine critical business initiatives and most importantly, avoid knee-jerk reactions.”

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