Yahoo Finance Twilio’s Jeff Lawson Steps Down From CEO Role and Board
(Bloomberg) -- Twilio Inc. Chief Executive Officer Jeff Lawson is stepping down from leading the software company he co-founded amid slowing sales growth and pressure from activist investors.
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Lawson will be replaced by Khozema Shipchandler, who most recently led the communication business unit, Twilio said in a statement Monday. Lawson will also step down from the board and Jeff Epstein, a former Oracle Corp. executive, will become board chair. Twilio shares jumped 7% in New York at 10:35 a.m.
The company, known for its businesses-to-consumer communication services, has struggled to maintain its once-high revenue growth and investor excitement. It has announced three separate rounds of layoffs since fall 2022.
Lawson’s departure was a “step in the right direction,” said Sagar Gupta, a portfolio manager of Anson Funds, which has taken a stake in Twilio and had discussed the CEO role with the company’s board.
“That said, we believe that more actions are needed to maximize value for shareholders,” he said. “We look forward to continuing to engage with Twilio’s board and management team going forward.”
Anson Funds has pushed for a sale of Twilio in its entirety or a divestment of the data and applications business unit.
The Information earlier reported Anson Fund’s involvement and that Legion Partners had also built up a stake in Twilio.
Shareholders have tired of the growth-at-all-costs approach which has been dominant in the software industry in recent years. And Lawson is associated with that course, said RBC Capital Markets Analyst Rishi Jaluria. Lawson’s founder shares in the company, which conferred special voting rights, expired last year. That made him vulnerable to the possibility of investors voting against him remaining on the board at the annual meeting this year.
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Lawson co-founded the company in 2008 after stints at Amazon Web Services and Stubhub Inc. “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,” he said in the statement. Lawson is known as a major donor to Democratic candidates and supporter of nonprofits.
Shipchandler, the new CEO, previously served as the company’s chief financial officer. He successfully pivoted Twilio’s communication business unit — by far its largest — into profitable growth over the past year, Epstein said in the statement. “This appointment ensures that Twilio is best positioned to deliver increased value to all stakeholders going forward,” he added.
Still, RBC’s Jaluria said that investors unhappy with Lawson may be lukewarm on his successor. “Khozema’s been the loyal right-hand man to Jeff Lawson this whole time, so I don’t know if we’re going to get anything significantly different.”
Lawson’s leaving could open the door to Twilio splitting its communications and software businesses, Piper Sandler analyst James Fish wrote in a note. Twilio’s software unit includes the Segment Customer Data Platform, which is one of the company’s major growth bets. Fish questioned why a wider CEO search wasn’t conducted.
(Updates with context from fifth paragraph.)
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