Snap, the parent firm of Snapchat, has recently joined the ranks of digital corporations aiming to reduce labor costs by reducing staff. On Monday, Snap revealed that it intends to let off roughly 10% of its full-time employees worldwide as the firm continues to struggle with revenue products in the face of declining demand for digital advertising.
The layoffs come after Snap announced plans to let go of roughly 10% of its full-time workforce worldwide last year, when company conducted substantial staff cutbacks. This action follows two years of workforce reductions: a 20% reduction in 2022 and a 3% reduction in 2023. By the start of 2023, Snap employed about 5,300 people. At the start of the year, Snap employed 5,300 people in total.
In a statement to the Verge, Snap stated that the layoffs are necessary to “best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time.” However, the company did not name the particular departments that were impacted.
Soon, affected workers will receive notification, and according to reports, Snap will have to pay about $75 million for severance and other associated expenses due to the layoffs.
Notably, Snap’s revenue has been falling for the past two quarters even if it saw growth in Q3 2023. A number of the company’s other goods and services, such the failed Snapchat AR glasses, the selfie drone, Spotlight, and the Snapchat subscription service, are all having difficulties.
Now, though, the business intends to remain together come January 1. Even with regard to 2024, Snap CEO Evan Spiegel has set ambitious goals: he wants to double the number of Snapchat Plus customers from the current 7 million to 20 million, boost daily users by 17 percent, and increase ad income by 20 percent. However, the business has been losing money and has not been able to reach its own objectives.
The Verge received an email from Farrin Jay, a spokesman for Snap, saying, “We are restructuring our team to foster more collaboration and less hierarchy.” We value the efforts and achievements that our departing team members have made to Snap and are dedicated to providing them with support.”
Meanwhile, major tech firms like Google and Meta experienced staff cutbacks in the most recent round of layoffs. These companies are dealing with how to balance cost-cutting initiatives with the need to remain competitive. Data from the website layoffs.fyi, which tracks job losses in the technology sector, shows that over 232,000 jobs were eliminated in 2023, and over 30,000 people were let go in January 2024. More layoffs are expected in the upcoming months.
