According to people acquainted with the matter, Snap plans to lay off approximately 20 percent of its more than 6,400 employees.
Furthermore, the people explained that the layoffs, which Snap has been planning for the past several weeks, will begin on Wednesday and hit some departments harder than others.
The firing of employees is held in many departments of Snaps Inc; for instance, Snap’s team working on ways for developers to build mini-apps and games inside Snapchat will be acutely influenced.
Moreover, Zenly, the social mapping app which Snaps procured in 2017 and has since run separately, will also be insubstantial.
Another team that will see layoffs is Snap’s hardware division, responsible for its AR Spectacles glasses and the Pixy camera drone that was recently canceled after being on sale for just a few months. The company’s ad sales organization is also being restructured with Jeremi Gorman, Snap’s chief business officer, departing to run ads for Netflix.
However, Russ Caditz-Peck, a Snap spokesperson, denied commenting on the layoffs.
Although the scale of the dismissal is significant, it shouldn’t necessarily come as a surprise as the company revealed that, Snap’s stock price had lost nearly 80 percent of its value since the beginning of this year in May that it would slow hiring and look for ways to cut costs.
As a result, Snap delivered dismal earnings for the second quarter and said it wouldn’t forecast results for the third quarter.
Similar to its other technical companions, Snap hired assertively during the pandemic. By the time in March 2020, it employed roughly 3,427 full-time employees and ended last quarter with 6,446, a 38 percent increase from last year.
Also, the company made its largest procurement by buying WaveOptics, the supplier of the AR displays used in its latest Spectacles, for more than $500 million in May of 2021.
The complication is that Snap’s business hasn’t proceeded well coming out of the pandemic, unfortunately, due to recession fears and the trouble it had navigating Apple’s crackdown on ad tracking across iOS apps.
Meanwhile, Snap’s user base has grown enormously as it has 347 million daily users, which is more than Twitter, but it has managed to turn a profit only once since it went public in 2017.