Snapchat’s parent company, Snap, has decided to trim its workforce by 10% to reduce costs, joining other tech firms in similar moves. This announcement comes as Snap faces challenges with revenue growth and digital advertising declines. Last year, the company also cut jobs by 10% and had previously reduced staff by 20% in 2022 and 3% in 2023. Snap aims to streamline operations to focus on key priorities and allocate resources for growth. While specific departments affected were not disclosed, Snap plans to spend approximately $75 million on severance and related expenses for the affected employees.
Despite Snap’s revenue growth in Q3 2023, it has declined for two consecutive quarters. The company faces obstacles with various products like Snapchat AR glasses, selfie drones, Spotlight, and Snapchat Subscription service. CEO Evan Spiegel aims for ambitious growth targets in 2024, including a 17% increase in daily users, a 20% rise in ad revenue, and a doubling of Snapchat Plus subscribers from 7 million. However, Snap has struggled to meet its targets and remains unprofitable.
Snap’s restructuring aims to foster collaboration and reduce hierarchy within the company. The layoffs coincide with similar moves by tech giants like Meta and Google, reflecting industry-wide challenges. According to layoffs.fyi, over 232,000 tech industry job cuts occurred in 2023, with more than 30,000 layoffs already in January 2024, indicating ongoing workforce reductions in the sector.
