Software provider Twilio (NYSE:TWLO) said Monday it would lay off roughly 5% of its workforce citing underachievement in the growth of a unit that activist investors have targeted.
The company expects to take restructuring charges ranging between $25 million and $35 million. It reaffirmed its guidance for the upcoming fourth quarter and the full year. The cuts will affect about 300 employees, based on Twilio’s headcount in its recent regulatory filings.
According to a letter from CEO Jeff Lawson attached to a regulatory filing, the cuts are part of a broader plan to streamline Twilio’s offerings. The company is also sunsetting its Programmable Video product as part of the plan.
The cuts will strike deepest in Twilio’s Data and Applications unit, the same unit activist investors at Legion Partners and Anson Funds are pushing Lawson to divest.
Twilio has now executed three rounds of layoffs in slightly more than a year. Twilio cut 17% of its workforce, or about 15% of its employees, in February. Still, Legion believes the company can cut more jobs, according to reports.
A Twilio spokesperson declined to comment on shareholder input in the restructuring plan, which the company called the “December Plan” in a Securities and Exchange Commission filing.
Lawson said in his letter that Twilio will also change how it sells its Flex digital engagement product. The layoffs will eliminate “many” Flex sales positions and fold those responsibilities into the existing Communications sales team, Lawson said.
TWLO shares dipped 66 cents to $66.92.