By Svea Herbst-Bayliss

NEW YORK (Reuters) – Cloud communications company Twilio has appointed a partner at Sachem Head Capital Management to its board, it said on Monday, as it faces pressure from several activist investment firms to make significant changes.

Twilio added Andy Stafman and expanded the size of the board by one person to 10 people.

The change removes the chance of a boardroom challenge from Sachem Head in 2024 when three Twilio directors, including Chief Executive Khozema Shipchandler and board Chairman Jeff Epstein, are scheduled to stand for election.

Sachem Head, which has been invested on and off in Twilio over the last years, built its current position in the last weeks, people familiar with the matter said. The exact size of Sachem Head’s stake in Twilio could not be determined.

Twilio, which was founded in 2008 and became a publicly traded company in 2015, makes products that help developers build communication features for receiving phone calls and text messages. It has a market value of $11 billion.

The company has come under pressure from activist investors including Legion Partners and Anson Funds. Both have been pushing the company to explore strategic alternatives, including divesting the data and applications business or selling the whole company.

Twilio’s stock price has fallen 14% since January compared with the technology-heavy Nasdaq Index’s 11% gain during the same time. The stock closed at $61.15 on Friday and has lost roughly 85% from its peak in early 2021 as millions of people worked from home during the COVID-19 pandemic.

The company made changes earlier this year when it promoted Shipchandler, who most recently was President of Twilio Communications and previously held positions as the company’s chief operating officer and chief financial officer, to replace Jeff Lawson. Lawson co-founded the company and was its chief executive.

The company also cut costs last year, added an independent director with software experience and in March committed to expand its stock buyback program by an additional $2 billion through 2024. It authorized a $1 billion stock buyback program last year.

Sachem Head, which oversees $3.4 billion in assets, has made previous software investments. It nominated three directors to the board of Anaplan, which was sold to Thoma Bravo to avoid a board fight. It settled for three board seats, including one for its portfolio manager Scott Ferguson, at design software maker Autodesk.

(Reporting by Svea Herbst-Bayliss in New York; Editing by Matthew Lewis and Barbara Lewis)