😱 Adobe buys Figma, Twilio lays off 930, and more.

This is The Level Ups. Modern business news for the future business leader (explained in plain-Jane English).

Happy Friday!

• Adobe buys Figma (the price/valuation is the highest I’ve seen).

• Twilio lays off 930 people and makes the weirdest announcement.

• I made something to help you or anyone you know get a better job.

Let’s get into it.

Estimated reading time: 4 minutes & 30 seconds. 

Adobe Agrees to Purchase Design Software Figma for $20B.

This image tells the story.

Credit to Morning Brew for the image.

Figma and Adobe are two companies with competing design software products. Adobe was always the dominant player, but then Figma showed up.

The design community eventually fell in love with Figma and made the switch. It's a classic case of buying out your competitor (or selling out, depending on how you look at it). 

Before the deal details, there’s some “controversy.”

In the beginning, Figma made an enemy out of Adobe. They’d preach “never being like Adobe” and all that. 

But now it comes off a like hypocrisy. And it kind of is. They sold themselves to their worst enemy.

Yes, there’s a lot of criticism online. But come on. It’s 20 billion dollars. Who’s saying no to that???

What’s This Deal Really About?

Here are the details:

• Figma did $400M in 2022 revenue. The purchase price was $20B (50x annual revenue).

• Adobe removed the biggest threat to their business.

• Adobe also gets an amazing, fast-growing company ($200M 2021 revenue).

• The amazing team behind Figma also goes to Adobe (if they want to).

Adobe knew it was just a matter of time until Figma crushed them - so they made an offer that was so good that Figma just couldn’t say no.

Was it worth it, though?

Not Everyone’s Happy

That purchase price is extreme in a recession. Adobe’s stock price has since taken a hit.

4pm the day before the announcement, the stock price was $371.52.

10am the next day, just after the announcement, the stock price dropped to $318.42. 

It dropped more than 16.5%. Feel free to look it up if you’re curious.

When a company you’ve invested in unloads $20B during a recession, it’s natural to ask questions and lose confidence.

Investors probably don’t even know what Figma is (most people don’t).

It gets worse.

Shareholders were already unhappy before this acquisition. Adobe’s stock price was nearly $450/share last month. It’s tanking, and now there’s more bad news.

This is how it sounds.

“Hey, remember how it’s already been a bad month? Well, we just dumped $20B to buy a competitor (you don’t know them) for 50x their annual revenue.”

It’s adding fuel to the fire.

The good news for them is that the price should go back up when investors see it’s a (potentially) company-saving move. Investor relations 101.

Lessons Learned

Recessions don’t matter when you build a great company with a loving community.

Designers may feel like it’s selling out, but I doubt they would turn down $20B if they even had the choice.

Figma got the best deal possible at one of the highest valuations I’ve ever seen.

Adobe avoids getting crushed in 5-10 years (and enjoys some peace of mind). 

I’d say both sides made the right call. Congrats to them.

Twilio Lays Off 930 and Makes The Weirdest Announcement

Unfortunately, even Twilio made mass layoffs.

Twilio is a leader in text message marketing software. They also own several other platforms, such as SendGrid, a popular email marketing / sales tool.

This makes for about 11% of their workforce. The team describes it as tough but necessary as they push to become profitable in 2023.

These layoffs might come off like an evil conglomerate laying off poor, unfortunate workers. It’s really not so bad.

Here’s why (in Twilio’s case).

• Everyone laid off automatically gets 12 weeks’ pay (severance).

• Plus another week for every year of service (3 years worked is 3 more weeks pay).

• They get added to several networks that will help them find a new job.

It sucks to get laid off. 12-18 weeks pay as your severance and support getting a new job is not so bad.

Twilio’s Announcement

This one blew my mind.

You know how when someone starts a sentence with “honestly,” it makes you wonder why they had to say it? Does that mean they’re lying if they don’t say it?

Why bring that kind of attention to yourself? It makes you look way more suspicious.

Twilio just did that x1000.

Read this and let me know if I’m crazy:

I'd find that weird if I still worked a day job and the CEO announced something like this during layoffs.

Bad Times Make Good People Do Weird Things

It seems like they're trying to get ahead of bad PR because they really can’t afford it. Twilio stock price has dropped 73% this year already. 

Here’s the thing:

Twilio makes over $900M in revenue (that’s just Q2), BUT IT’S NOT PROFITABLE. That’s why they’re firing all those people in the first place.

I get how software companies operate at a loss sometimes, but damn. There’s no telling what people might do when it's that bad.

No wonder they’re scared of bad PR. I’d be scared to leave my home if I couldn’t make a profit out of $900M.

Tough situation. Fortunately, it looks like the folks who got laid off are getting a lot of support.

Let’s Get You A Better Job

I’ve made something to help people land a new job, whether they’ve been laid off or not.

It’s straightforward.

• Fill out this form

• Include details on your desired job / industry (you can even link me to the exact posting).

• Upload your resume.

I will put your resume on my screen and record a 5min video walking through all the suggested edits. It’s step by step and easy to follow.

Recruiters, hiring mangers, and business owners often ask me if I know anyone looking for a job. You’ll also be added to my list of candidates.

Just yesterday I introduced someone who filled out the form to a recruiter. Hopefully it works out. Either way, it’s worth giving it a try.

Feel free to share this with anyone you know looking for help finding their next position.

I’ll keep doing these in my spare time while I can. It’s free btw.

Thanks for reading!

See you Monday,

Darwin