Snap to Lay Off 20% of Its Workforce, Cut Some Projects
The decision is tied to companywide restructuring efforts.
- Though Kourtnee hasn't won any journalism awards yet, she's been a Netflix streaming subscriber since 2012 and knows the magic of its hidden codes.
Snap, the parent company of Snapchat, is laying off approximately 20% of its staff, CEO Evan Spiegel confirmed in a memo on Wednesday.
In addition to job cuts, multiple projects have been scrapped, including the camera-enabled Pixy drone, Snap Originals, Zenly and Snapchat's games. Spiegel explained that the company is restructuring its business in light of slowed revenue growth, which has been roughly 8% year over year and is forecast to remain 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 advance those goals. Its investment in and development of Spectacles AR hardware are still active, however.
Snap employs roughly 6,000 people, and Spiegel noted it was a difficult decision to scale down its team size. As part of its reorganization plan, the company promoted Jerry Hunter to COO to oversee product, sales, growth and content. Snap is also seeking to fill several executive leadership roles under its new structure.
The Verge earlier reported that the company was planning to reduce its workforce following dismal second-quarter earnings results.
Social media companies like Snap have faced a decline 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 challenging economic environment have impacted Snap's bottom line. Looking ahead, Spiegel said the company hopes to avoid future layoffs while working to improve its overall revenue growth.