On Monday, Twilio announced that approximately 300 employees, equating to 5% of personnel, would be laid off. This was largely concentrated on its Data & Applications division, which is currently under pressure from two activist investors pushing for divestment at the minimum, and, potentially, a complete sale of the company.
Twilio, a software provider, announced on Monday it would reduce its workforce by around 5%, amounting to 300 employees, based on the company's recent regulatory filings. The restructuring will come with a charge of between $25-35 million. Although Twilio reaffirmed its guidance for the fourth quarter and the year, shares dropped 0.5%, likely due to the announcement. Furthermore, the company is sunsetting its Programmable Video product as part of the December Plan. The layoffs are particularly hitting its Data and Applications segment, which activist investors Anson Funds and Legion Partners are pressuring CEO Jeff Lawson to divest. Twilio has gone through three rounds of layoffs in the past year, and Legion Partners is pushing for further job cuts. Anson Funds declined to comment on its influence in the restructuring while Twilio's spokesperson declined to discuss shareholder input. The company is also streamlining its Flex digital engagement product by eliminating "many" sales positions and transitioning those roles to its Communications sales team. Furthermore, Twilio's CEO mentioned that the company's bet on Segment in its Data and Applications group lacked the growth they had expected. Since its IPO in 2016, Twilio's share price has risen 36% year-to-date although it has seen highs with the broader tech industry in 2021. Anson and Legion have both amassed individual stakes of around $50 million in Twilio. Additionally, the activists are reportedly pushing for management changes at the company.
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