Snap, the developer behind Snapchat, is planning to lay off roughly 10% of its workforce, impacting an estimated 500-plus employees, according to an announcement on Monday. The decision was explained in an SEC filing as part of a restructuring strategy to maximize the company’s growth potential.
While a significant proportion of the layoffs’ associated costs would be encountered in the first quarter of 2024, some costs may extend into Q2, depending on local laws and other factors. In a statement, a Snap spokesperson emphasized that the reorganization aims to reduce hierarchy and encourage in-person collaboration, while supporting and expressing gratitude to departing employees.
This follows a smaller headcount reduction and product team reorganization in late 2023, which was aimed at minimizing layers and hastening decision-making. Structural changes were also made in 2022, resulting in a 20% staff cut. The company’s investments in hardware, like Snap Spectacles and Pixy drone, have yet to yield profits.
Despite beating analysts’ estimates for Q3 earnings regarding revenue, earnings per share, and user growth, Snap warned investors about a volatile ad market. The company’s net loss widened by 2% year-over-year to $368 million in the quarter.
As of Q3, Snap had 5,367 employees. The company-wide layoffs reportedly began on Friday, with additional job cuts anticipated throughout the week.
