by Snap, the parent company of Snapchat, has recently joined the ranks of tech companies aiming to reduce labour costs by reducing staff. On Monday, Snap revealed that it intends to lay off roughly 10% of its full-time employees worldwide as the company continues to struggle with revenue products in the face of declining demand for digital advertising.
The layoffs come after Snap’s significant staff reductions from the previous year, when the company announced plans to let go of roughly 10% of its full-time workforce worldwide. This action follows two rounds of staff reductions, of 20% and 3% in 2022 and 2023, respectively. Snap employed about 5,300 people at the start of 2023. At the start of the year, 5,300 people were employed by Snap.
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, the impacted 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 though it saw growth in Q3 2023. A number of the company’s other goods and services, like the failed Snapchat AR glasses, the selfie drone, Spotlight, and the Snapchat subscription service, are also having difficulties.
Now, though, the business intends to remain intact 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 subscribers from the current 7 million to 20 million, grow daily users by 17 percent, and increase ad revenue by 20 percent. Nevertheless, 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 contributions 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 reductions in the most recent round of layoffs. These companies are grappling 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 employees were let go in January 2024. More layoffs are expected in the upcoming months.
