According to those familiar with the situation, Snap plans to lay off around 20% of its more than 6,400 workers.
The layoffs, which Snap has been preparing for some weeks, will begin on Wednesday and will be more severe in certain divisions than others, according to the sources. The team focusing on methods for developers to create micro applications and games within Snapchat, for example, will be badly harmed. Zenly, the social mapping startup Snap purchased in 2017 and has since run independently, will also see significant changes.
Snap’s hardware group, which is responsible for its AR Spectacles eyewear and the Pixy camera drone, which was recently scrapped after just a few months on the market, may also face layoffs. Jeremi Gorman, Snap’s chief business officer, is leaving to oversee advertisements for Netflix, thus the company’s ad sales team is also being revamped.
Though the extent of the layoffs is large, it should not be surprising: Snap’s stock price has dropped about 80% since the beginning of the year, and the firm said in May that it will restrict recruiting and seek methods to reduce expenses. It subsequently reported abysmal second-quarter profits and said that it would not anticipate third-quarter results.
Snap, like its other tech companies, actively recruited throughout the epidemic. It began March 2020 with around 3,427 full-time workers and concluded the quarter with 6,446, a 38 percent growth over the same period the previous year. In May 2021, the business completed its biggest purchase yet, paying more than $500 million for WaveOptics, the producer of the AR displays utilized in its newest Spectacles.
The issue is that Snap’s company has struggled since the outbreak, owing to economic worries and difficulties managing Apple’s ban on ad monitoring across iOS applications. Snap’s user base has grown rapidly — it now has 347 million daily users, which is more than Twitter — but it has only turned a profit once since going public in 2017.