Snap Announces 10% Workforce Reduction in Latest Round of Layoffs
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To support its further growth, Snapchat maker Snap has made the difficult decision to conduct a 10% reduction in its workforce, the company announced on Monday. The layoffs are estimated to affect more than 500 employees, based on Snap’s headcount figures from November 2023. The announcement was made through an SEC filing, where Snap explained the necessity of the move. While the majority of the costs incurred by the layoffs are expected to be in the first quarter of 2024, some costs may extend into the second quarter due to local law and other factors.
Background
These layoffs mark the second wave of staff reduction in a matter of months for Snap, following a smaller headcount reduction late last year. The company is restructuring its team to reduce hierarchy and promote in-person collaboration. Snap’s VP of Engineering, Nima Khajehnouri, also departed during the previous round of layoffs. Snap’s hardware products, including Snap Spectacles and Pixy drone, have also not met expectations, with the latter being recently recalled over a fire risk. Additionally, Snap had previously implemented a larger restructuring with a 20% staff reduction in 2022.
Market Response and Outlook
Snap’s stock initially experienced a jump after reporting its Q3 earnings in October, beating analysts’ estimates. However, the company cautioned investors about the volatile advertising market and clients’ ad campaigns being put on hold. Snap currently holds a 0.6% share of the global digital ad market. Despite the anticipated decline in ad revenue for 2023, Snap remains focused on its growth and is expected to report solid financial results going forward.
About Snap
Snap is a tech company known for its social media platform, Snapchat. With 406 million global daily active users, Snap continues to innovate and evolve its services to cater to changing user demands and market conditions. The company constantly strives to maximize its impact while minimizing its costs and remains committed to delivering a high-quality user experience.
