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Twilio (TWLO) to Lay Off 5% Workforce to Improve Profitability
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Twilio Inc. (TWLO - Free Report) recently revealed that it is going to further extend its workforce restructuring plan by reducing its total global workforce by approximately 5%. At the end of the third quarter of 2023, the company had 5,905 employees globally.
In a Dec 4 filing with the Securities and Exchange Commission (“SEC”), Twilio revealed that the restructuring plan has been “intended to streamline operations and accelerate the company’s path to profitable growth.”
Twilio’s current restructuring plan will include cash expenditures for employee transition, notice period and severance payments, employee benefits and related facilitation costs. This San Francisco-based company projects around $25-$35 million in charges for its restructuring plan.
The cloud communications service provider expects the majority of the charges to be incurred in the fourth quarter of 2023 and the whole process to be closed by the end of the first quarter of 2024. However, the estimated period might get extended due to different local laws and consultation requirements in various jurisdictions in which Twilio operates.
Internet software companies like Twilio were among the strong beneficiaries of the pandemic-induced demand boom for cloud-based services from businesses looking to operate amid lockdowns. Twilio hired aggressively in 2020 and 2021 to capitalize on the opportunity.
However, with the reopening of economies, the demand for such services started to moderate in 2022, thereby slowing the growth rate of Twilio. Additionally, growing global slowdown concerns amid the current macroeconomic challenges and geopolitical tensions have led the enterprise to push back its IT spending plans.
Therefore, Twilio announced its mega “Restructuring Plan” in September 2022, under which it has reduced its global workforce by more than 34% as well as closed certain offices by the end of third-quarter 2023. The strategy has been paying off well, as evidenced by its last four quarters’ performance, wherein it reported a strong year-over-year improvement in non-GAAP earnings per share.
Zacks Rank & Stocks to Consider
Currently, Twilio carries a Zacks Rank #3 (Hold). Shares of TWLO have risen 37.9% year to date (YTD).
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has moved a penny north to 44 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 2 cents to 95 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 136.3%. Shares of INTC have surged 60.2% YTD.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has moved north 14 cents to $1.49 per share in the past 30 days. The consensus estimate for fiscal 2024 earnings has increased 5 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 32.3%. Shares of AZPN have dropped 0.6% YTD.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has moved north 9 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 21 cents to $1.53 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 28.6%. Datadog shares have rallied 60.8% YTD.
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Twilio (TWLO) to Lay Off 5% Workforce to Improve Profitability
Twilio Inc. (TWLO - Free Report) recently revealed that it is going to further extend its workforce restructuring plan by reducing its total global workforce by approximately 5%. At the end of the third quarter of 2023, the company had 5,905 employees globally.
In a Dec 4 filing with the Securities and Exchange Commission (“SEC”), Twilio revealed that the restructuring plan has been “intended to streamline operations and accelerate the company’s path to profitable growth.”
Twilio’s current restructuring plan will include cash expenditures for employee transition, notice period and severance payments, employee benefits and related facilitation costs. This San Francisco-based company projects around $25-$35 million in charges for its restructuring plan.
The cloud communications service provider expects the majority of the charges to be incurred in the fourth quarter of 2023 and the whole process to be closed by the end of the first quarter of 2024. However, the estimated period might get extended due to different local laws and consultation requirements in various jurisdictions in which Twilio operates.
Twilio Inc. Price and Consensus
Twilio Inc. price-consensus-chart | Twilio Inc. Quote
Cost-Cutting Plans Aid Twilio’s Profitability
Internet software companies like Twilio were among the strong beneficiaries of the pandemic-induced demand boom for cloud-based services from businesses looking to operate amid lockdowns. Twilio hired aggressively in 2020 and 2021 to capitalize on the opportunity.
However, with the reopening of economies, the demand for such services started to moderate in 2022, thereby slowing the growth rate of Twilio. Additionally, growing global slowdown concerns amid the current macroeconomic challenges and geopolitical tensions have led the enterprise to push back its IT spending plans.
Therefore, Twilio announced its mega “Restructuring Plan” in September 2022, under which it has reduced its global workforce by more than 34% as well as closed certain offices by the end of third-quarter 2023. The strategy has been paying off well, as evidenced by its last four quarters’ performance, wherein it reported a strong year-over-year improvement in non-GAAP earnings per share.
Zacks Rank & Stocks to Consider
Currently, Twilio carries a Zacks Rank #3 (Hold). Shares of TWLO have risen 37.9% year to date (YTD).
Some better-ranked stocks from the broader technology sector are Intel Corporation (INTC - Free Report) , Aspen Technology, Inc. (AZPN - Free Report) and Datadog, Inc. (DDOG - Free Report) . Intel and Aspen each sport a Zacks Rank #1 (Strong Buy) at present, while Datadog carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has moved a penny north to 44 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 2 cents to 95 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 136.3%. Shares of INTC have surged 60.2% YTD.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has moved north 14 cents to $1.49 per share in the past 30 days. The consensus estimate for fiscal 2024 earnings has increased 5 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 32.3%. Shares of AZPN have dropped 0.6% YTD.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has moved north 9 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 21 cents to $1.53 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 28.6%. Datadog shares have rallied 60.8% YTD.