Snap Inc. Announces Layoffs Affecting 10% of Workforce

In a year marked by numerous tech industry layoffs, Snap Inc., the parent company of Snapchat, is now joining the list.

Snap Inc. Headquarters

The company has announced plans to lay off approximately 529 employees, attributing the decision to a decrease in digital ad spending and the impact of the Russian-Ukrainian conflict.

Snap is undergoing a significant restructuring, which includes canceling its original series. Earlier this year, the company had extended content agreements with major players such as Disney, ViacomCBS, and NBCUniversal.

In a recent filing with the US Securities and Exchange Commission, Snap detailed the layoffs, stating that this move aims to better position the company to focus on its highest priorities and ensure capacity for incremental growth investments. The restructuring will result in a one-time charge of $55 million to $75 million, primarily for severance payments. However, the company anticipates saving around $500 million annually in costs once these payouts are complete.

This isn't the first time Snap has reduced its workforce; the company cut about 20% of its staff in 2022. At the beginning of 2023, Snap had approximately 5,300 employees and has since reduced its workforce by an additional 3%.

Snapchat App Interface

Snap will report its fourth-quarter 2023 earnings tomorrow, which could provide more insight into the company's current situation and future plans.

Snap has faced challenges in expanding beyond its core social networking platform. Initiatives like the Pixy selfie drone were quickly abandoned, and its augmented reality glasses were not widely released.

CEO Evan Spiegel has set ambitious goals for 2024, aiming for a 17% increase in daily users and hoping to reach 750 million monthly users and Daily Active Users (DAUs) on Snapchat+.

Evan Spiegel, CEO of Snap