| Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On December 4, 2023, Twilio Inc. (the “Company”, “we” or “our”) committed to a further workforce restructuring plan (the “December Plan”) intended to streamline operations and accelerate the Company’s path to delivering profitable growth. The December Plan includes the elimination of approximately 5% of the Company’s current workforce.
As a result of the December Plan, the Company estimates that it will incur approximately $25-$35 million in charges in connection with the workforce reduction, consisting of expenditures for employee transition, notice period and severance payments, employee benefits, and related facilitation costs, substantially all of which are expected to result in future cash outlays.
The Company expects that the majority of the restructuring charges related to the December Plan will be incurred in the fourth quarter of 2023 and that the execution of the December Plan, including cash payments, will be substantially complete by the end of the first quarter of 2024.
Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process beyond the first quarter of 2024 in certain countries. The charges that the Company expects to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above.
As part of the December Plan, Twilio Flex, the Company’s cloud contact center, will be reported as part of the Company’s Twilio Communications reportable segment in future periods. Prior periods presented for purposes of comparison will be recast accordingly.
| Item 7.01 | Regulation FD Disclosure. |
On December 4, 2023, the Company began notifying team members affected by the December Plan and communicated the changes to the entire company with a letter from Jeff Lawson, the Company’s Chief Executive Officer and Co-Founder, which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference.
The Company reaffirms its guidance for the fourth quarter and fiscal year ending December 31, 2023, that was provided by the Company on November 8, 2023. For more information about this guidance, refer to the press release, included as an exhibit to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 8, 2023. The costs associated with the December Plan will be included in the Company’s GAAP results but will be excluded from certain of the Company’s non-GAAP results.
The information furnished under this Item 7.01 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K and the accompanying Exhibit 99.1 contain forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “can,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern the Company’s expectations, strategy, plans or intentions. Forward-looking statements contained in this Current Report on Form 8-K and the accompanying Exhibit 99.1 include, but are not limited to, statements about the Company’s expectations regarding the costs, benefits, timing and financial impacts from the December Plan, the Company’s future financial performance, including the Company’s outlook for the fourth quarter of 2023 and fiscal year 2023, the Company’s expectations regarding profitability and growth, the Company’s product roadmap, including related to CustomerAI and video product, and related matters. You should not rely upon forward-looking statements as predictions of future events.
