Snap Joins Tech Layoff Wave, Slashes 10% of Staff
Snap Inc., the parent company of the popular social media platform Snapchat, is reducing its workforce by 10%, which will affect about 540 employees out of its reported 5,400 staff members. This decision comes amidst a broader trend of layoffs in the tech industry, with significant reductions also announced by other major companies such as Amazon, Google, and Microsoft. In a regulatory filing, Snap Inc. disclosed that it expects to incur charges ranging from $55 million to $75 million, predominantly due to severance and related costs.
The layoffs at Snap Inc. mark the company's efforts to streamline operations in the face of a declining digital advertising market. This cutback is part of a series of reductions by the company, including a 20% workforce reduction in 2022 and a smaller 3% cut in 2023. The latest move aims to prioritize Snap's strategic goals and enhance its capacity to invest in future growth, despite the company's challenges in expanding its offerings beyond its core social networking services and ventures into hardware such as augmented reality glasses and a selfie drone.
The downturn in Snap's financial performance, with revenue declines following a temporary increase in the third quarter of 2020, underscores the challenges faced by the tech sector in adapting to the post-pandemic market environment. As the layoffs proceed, Snap's stock has seen a 3% decline during intraday trading, reflecting investor reactions to the company's restructuring efforts.
