Snap intends to lay off workers owing to poor business performance
According to two individuals familiar with the preparations, Snap is in the early stages of contemplating layoffs.
The anticipated layoffs follow the company’s recent poor financial reports and failure to estimate profits for the third quarter, which sent its stock price plummeting to near-all-time lows. It’s unknown how many of Snap’s more than 6,000 workers will be laid off at this time since managers throughout the firm are still determining the full breadth of the layoffs for their teams.
Snap’s business has lately suffered on two fronts: The first is Apple’s implementation of the “Ask App Not to Track” prompt, to which an estimated 70% of iPhone customers have said “Yes,” making it more difficult for firms like Snap to target their adverts as efficiently. The second aspect is the larger economic slump, which has harmed the stock prices of Snap and other cash-burning firms in particular. Since going public in 2017, Snap has only had one profitable quarter.
Snap last let off employees in 2018, when the company was still dealing with the aftermath of a botched Snapchat revamp. Its user base has now increased to 347 million daily users, surpassing Twitter.
However, the firm has failed to establish a large advertising business. And its efforts to sell hardware, such as a $230 selfie drone, have been unable. In late May, CEO Evan Spiegel informed staff that the business will drastically reduce recruiting in order to “achieve significant cost reductions.”
Snap isn’t the only company that has to make cuts: Twitter, TikTok, and many other internet companies have announced layoffs or suspended recruiting in recent months. Even Snap’s much bigger and more prosperous social media rival, Meta, has paused recruiting and cautioned staff that difficult times are coming.