Snap to Lay Off 20% of Its Workforce, Cut Some Projects
Snap, the parent company of Snapchat, is laying off approximately 20% of its staff, CEO Evan Spiegel confirmed in a memo on Wednesday.
In additional to job cuts, multiple projects have been scrapped, counting the camera-enabled Pixy drone, Snap Originals, Zenly and Snapchat’s games. Spiegel explained that the company is restructuring its commerce in light of slowed revenue growth, which has been roughly 8% year over year and is forecast to remained low into next year. He stated Snap will focus on “community growth, revenue growth, and augmented reality” and pull back from anything that does not approach those goals. Its investment in and development of Spectacles AR hardware are mild active, however.
Snap employs roughly 6,000 people, and Spiegel renowned it was a difficult decision to scale down its team size. As part of its reorganization plan, the commercial promoted Jerry Hunter to COO to oversee product, sales, growth and content. Snap is also seeking to fill approximately executive leadership roles under its new structure.
The Verge posterior reported that the company was planning to reduce its workforce behindhand dismal second-quarter earnings results.
Social media companies like Snap have faced a refuse in digital ad revenue, making it difficult to monetize their platforms. Combined factors such as rising competition from rivals like TikTok, changes to Apple’s iOS and a inviting economic environment have impacted Snap’s bottom line. Looking presumptuous, Spiegel said the company hopes to avoid future layoffs once working to improve its overall revenue growth.
