Twilio CEO Departs Following Layoffs, Investor Concerns

‘The time has come for me to pass the reins of this extraordinary company to a new CEO to lead Twilio through its next chapter,’ says Twilio CEO and founder Jeff Lawson.

Twilio CEO Jeff Lawson has left the cloud software company he founded after activist investors pushed for his removal.

“The time has come for me to pass the reins of this extraordinary company to a new CEO to lead Twilio through its next chapter,” said Lawson in a blog post today. “Building Twilio over the past 15 years has been one of the most rewarding experiences of my life.”

Twilio’s current president and former chief operating officer, Khozema Shipchandler, is now the CEO of San Francisco-based Twilio.

The news of Lawson’s resignation today comes after several employee layoff rounds over the past 16 months.

Twilio’s (TWLO) stock price was up 6 percent as of Monday at 1 p.m. ET, trading at $73.51.

Shipchandler said the cloud communications company has implemented meaningful changes over the past 18 months to position the company for renewed growth and operational improvements.

“We have a strong foundation, but we always have more work to do,” said Shipchandler in a statement. “As I step into the CEO role, I am focused on continuing to build on the considerable growth and operating improvements we’ve made across the board, plus taking a fresh look at the areas of the business that are underperforming to realize the full potential of our business.”

Activist Investor: Lawson’s Departure ‘A Step In The Right Direction’

Twilio currently has more than 306,000 customers across the globe with annualized revenue of over $4 billion.

However, Twilio activist investors Anson Funds and Legion Partners have been pushing for Lawson’s removal since last year. The investors are reportedly seeking Twilio to sell itself or divest certain business units, specifically its data and applications business.

“We believe Founder Jeff Lawson’s departure from the company would be a step in the right direction and are pleased with the leadership change announced today,” said Sagar Gupta, Anson Funds portfolio manager, in a statement today. “That said, we believe that more actions are needed to maximize value for shareholders.”

The company has cut thousands of employees over the past 16 months.

In September 2022, Twilio announced it would be laying off nearly 1,000 employees in a move to increase profits and core priorities.

Then in February 2023, Twilio laid off 17 percent of its workforce or about 1,400 employees.

In December 2023, the company also unveiled plans to cut about 5 percent or its workforce, or approximately 300 employees, citing underperformance in its data and application business.

Twilio’s New CEO Mission

Twilio’s new CEO Shipchandler said he will be taking a “fresh look at the areas of business that are underperforming.”

“I am honored to step into the CEO role and to partner with our talented team to lead Twilio in its next era,” Shipchandler said. “Over the last year and a half, we have implemented meaningful changes across the organization to position ourselves for renewed growth and to drive operational improvements, optimize our capital allocation strategy, and enhance focus and execution.”

Shipchandler has over 25 years of experience growing businesses and driving financial performance across global, public organizations. Prior to joining Twilio as chief operating officer and chief financial officer in 2018, he spent two decades at GE Digital as its chief commercial officer.

Shipchandler also touted Twilio’s leadership under Lawson since 2008.

“Jeff led Twilio through its incredible evolution from a disruptive startup to an admired public company,” he said. “Jeff also pushed the tech industry forward in many ways – democratizing business communications and making a hero of developers. His mark on Twilio is indelible and I have profound respect for him as a leader and friend.”

Lawson, for his part, said he leaves the company in the hands of a “great leader” in Shipchandler with confidence in the future.

“Khozema is a great leader, and I am confident he will lead the company well,” said Lawson. “Thank you to every Twilio customer, employee and developer I’ve had the privilege of building with – I can’t wait to see what you build next.”

The company will report its fourth fiscal quarter 2023 financial results on Feb. 14.