Companies are already into round two of layoffs in what seems to be a spiraling tech sector with no relief in sight, at least for now. Customer engagement services provider Twilio announced a fresh round of layoffs, while Meta is reportedly planning to offload more employees. Meanwhile, quantum computing company Rigetti Computing is handing pink slips to a significant portion of its employees after replacing its CTO and CFO recently.
Even as the outlook for the entire calendar year may not be as gloomy, tech companies are having to resort to drastic measures to increase efficiency. As such, Twilio said it is parting ways with 17% of its workforce, while Rigetti said it is laying off 28% of its staff. A Financial Times reportOpens a new window mentions Meta is expected to announce staff cuts in March though it is unclear exactly how many more Meta employees would get the axe.
The fresh Twilio and Rigetti cuts come after Zoom, Okta, Dell Technologies, GitLab, Splunk, and Secureworks announced respective layoffs.
Twilio layoffs
Twilio confirmedOpens a new window it would cut 17% of its current staff, which equates to ~1,400 of its 8,176 employees. In September 2022, the communications tools vendor had already laid off 816, or 9.1% of its 8,992 employees, as part of restructuring efforts before its Q3 2022 quarterly earnings call.
Twilio announced the latest cuts two days before it was scheduled to present its Q4 2022 results. In an SEC filingOpens a new window dated February 13, 2023, Twilio said it expects “at or above the guidance ranges†it provided in November last year for Q4 2022.
“Now we have to prioritize profit far more than before. We’re exiting the last phase with a great market position, and very strong cash reserves, but unfortunately that’s not enough to get us through the next phase. We have to spend less, streamline, and become more efficient,†wrote Twilio CEO Jeff Lawson.
Lawson added that the company had become “too big†and announced the consolidation of operations under two divisions: Twilio Data & Applications and Twilio Communications.
Within the U.S., Twilio employees are entitled to 12 weeks of base pay plus one week for every year of completed service at Twilio, health coverage and career resources. Outside the U.S., Twilio employees will receive a similar severance except for healthcare coverage. Combined, the send-off is expected to cost Twilio between $100-$135 million.
That’s not all, though. Twilio’s February 13 SEC filing is also discontinuing book and wellness allowances, eligibility for Twilio Recharge. The company is also closing down some offices over the next few months, costing $10 million to $25 million.
As a sign of solidarity, Lawson also requested to cut his salary by half, to $65,535 per annum.
Meta layoffs
In November 2022, Meta laid off 11,000 employees, which at 13% of the workforce, was its biggest ever. According to a report, the company could follow up with more in March 2023, pending performance reviews.
Two people familiar with the development sat the social networking, and advertising giant revealed to Financial Times that Meta has delayed finalizing team budgets. Additionally, the lack of clarity has left managers unable to plan ahead, thus resulting in “zero work†being done.
The messy situation has reportedly put the company at a standstill with project and budgeting decisions that should and previously took days to finalize are now taking months. Some decisions that should have been finalized end of last year are still pending, the sources told FT.
See More: Hiring in Tech: From Employer’s Market to the Candidate’s Market
In December 2022, Meta consulting CTO John Carmack quit his role, citing inefficiencies at the company. Carmack said Meta operates at half the efficiency that it should. “There is no way to sugar coat this; I think our organization is operating at half the effectiveness that would make me happy,†Carmack wrote in a postOpens a new window .
“It has been a struggle for me. I have a voice at the highest levels here, so it feels like I should be able to move things, but I’m evidently not persuasive enough. A good fraction of the things I complain about eventually turn my way after a year or two passes and evidence piles up, but I have never been able to kill stupid things before they cause damage, or set a direction and have a team actually stick to it. I think my influence at the margins has been positive, but it has never been a prime mover.â€
Meta CEO Mark Zuckerberg called 2023 the “year of efficiency†during Meta’s Q4 2022 earning call. So it seems someone listened, but it has come at the expense of possibly thousands of more jobs.
“When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end. Since then, we’ve taken some additional steps like working with our infrastructure team on how to deliver our roadmap while spending less on capex,†Zuckerberg saidOpens a new window .
“Next, we’re working on flattening our org structure and removing some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive. As part of this, we’re going to be more proactive about cutting projects that aren’t performing or may no longer be as crucial, but my main focus is on increasing the efficiency of how we execute our top priorities.â€
Meta’s company-wide headcount increased by 20% in 2022. As of December 31, 2022, Meta had 86,482 employeesOpens a new window , including the 11,000 it said it would fire in November 2022. Meta’s hiring freeze is still in effect.
In Q4 2022, the company posted revenue of $32.17 billionOpens a new window , above analysts’ expectations of $31.53 billion but down 4% year-over-year. Q4 2022 was Meta’s third straight quarter with a negative YoY revenue growth.
Meta chief business officer Marne Levine is stepping downOpens a new window after more than a decade with Facebook, Instagram, WhatsApp, and Oculus owner. In her 13 years at Meta, Levine served in various executive capacities, including as Instagram’s first chief operating officer. She also served as the vice president of global public policy for Facebook and the vice president of global partnerships, business and corporate development at Facebook.
Meta executives Nicola Mendelsohn and Justin Osofsky are slated to take over Levine’s functions starting February 21, 2023, when the latter officially relinquishes her title. However, Levine will stay at Meta until the summer to ensure a smooth transition.
Rigetti layoffs
Quantum computing startup Rigetti Computing replaced its founder CEO Chad Rigetti in December 2022. In two months, with incumbent CEO Dr. Subodh Kulkarni at the helm, Rigetti has announced a new product roadmap, is replacing two C-suite executives and letting go of 28% of its workforce.
The cuts are expected to impact approximately 50 employees. The company is also replacing chief technology officer Mike Harburn with David Rivas and chief financial officer Brian Sereda with Jeffrey Bertelsen.
The company’s key strategic priorities include launching the Ankaa-1 84-qubit system in the first quarter of 2023 and further enhancing its performance when launched. The Ankaa-1 84-qubit system is designed with denser qubit spacing and tunable couplers to one up Rigetti’s current 80-qubit Aspen-M system.
“Specifically, upon the anticipated launch of the Ankaa-1 84-qubit system, Rigetti plans to focus its efforts on improving the performance of the system with the goal of reaching at least 99% 2-qubit gate fidelity on the anticipated Ankaa-2 84-qubit system, and if this target is achieved, Rigetti plans to shift its focus to scaling to develop the anticipated Lyra 336-qubit system,†Dr. Kulkarni wroteOpens a new window .
Rigetti’s long-term roadmap includes delivering a 1,000-qubit multichip system by 2025 and a 4,000-qubit multichip system by 2027. In a press release, Rigetti said the company’s “previously announced roadmap should no longer be referred to or relied upon.â€
Besides addressing deficiencies by instituting a prudent product roadmap, bringing operational changes and laying off a significant chunk of its employees, Rigetti, which went public in March 2022, is also staring at being delistedOpens a new window from Nasdaq due to noncompliance if it fails to keep its share price above $1 for ten consecutive business days before July 24, 0223.
If Rigetti cannot regain compliance before July 24, 2023, it can be eligible for an additional 180 calendar days to satisfy the requirements, but that comes with its own set of challenges.
Rigetti is expected to present its Q4 2022 and full-year earnings in March.
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