Snap, the parent of popular messaging app Snapchat, announced layoffs on Monday. Tech companies are the latest among many to cut jobs as advertising decreases and the number of companies looking at the same advertising pie increases. The company will cut more than 500 jobs. It said it is cutting 10 percent of its global workforce, and most of the cuts will occur in the first quarter of this year.
In a securities filing, the company said they had made a “difficult decision to restructure” their team. The filing noted that about $35 million to 75 million pretax would be used to be paid as severance as well as for costs related to the downsizing of Snap.
The company has most recently reported that it has 5,367 employees, so roughly 340 employees could lose their jobs in the coming months. In 2023, Snap had let go of a small amount of approximately 20 managers. However, in August 2022, Snap laid off many staff. Nearly 1,300 employees, or about 20 percent of its workforce, had lost their jobs during this downsizing.
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Snap saw its share price decline by 3 percent after the Monday announcement. The tech company will report its fourth-quarter results for 2023 on Tuesday, February 6, after the market closes.
Many tech companies have laid off staff from the beginning of this month. Some include Alphabet’s Google and YouTube, Microsoft Gaming, Amazon, TechCrunch, etc. Some media companies, including Business Insider, Sports Illustrated, Pitchfork (Conde Nast), and NBC News, have also had layoffs in the first month of 2024.
Evan Spiegel led Snap, which has seen a loss in advertising revenues. Four months ago, it closed its augmented reality services. It was planning to target businesses with this service. Snap has been unable to diversify, and its messaging app Snapchat has seen lower revenues, so the layoffs were expected.
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