Snapchat’s parent company is set to lay off around 530 employees, which accounts for approximately 10% of its global workforce. This move follows a trend among various tech companies opting for layoffs.
California-based social media company will focus on ‘in-person collaboration’ after eliminating jobs multiple times in recent years
Snap Inc has made the decision to reorganize their team in order to minimize hierarchy and encourage face-to-face collaboration. The company’s main priority is to provide support to the team members who will be departing as a result of this restructuring, according to a statement given to CNBC by Snap Inc.
Snap Inc has stated in a regulatory filing that it anticipates incurring charges amounting to $55 million to $75 million. These charges primarily consist of severance and related costs.
Snap, the social media company headquartered in Santa Monica, California, has undergone multiple rounds of job cuts in recent years. In August 2022, the company made an announcement about its intentions to reduce its global workforce by approximately 20%. Subsequently, in the third quarter of 2023, Snap began the process of winding down its AR Enterprise business, resulting in a reduction of its global employee headcount by around 3%, as reported in a regulatory filing. Additionally, the company issued a recall for its Pixy drone on Friday due to the potential fire hazard stemming from overheating batteries.
According to Snap’s website, Snapchat has an average of 406 million daily users. Additionally, it boasts over 5 million subscribers to Snapchat+.
Snap is one of several tech companies that have recently announced layoffs. In its gaming division, Microsoft is laying off approximately 1,900 employees, as stated in an internal memo. Last week, eBay laid off around 1,000 employees, which accounts for about 9% of its workforce. PayPal also announced a layoff of 2,500 employees, while Google cut 1,000 jobs in mid-January. Other companies that have joined the layoff trend include TikTok, as well as Amazon divisions Twitch, Audible, and Riot Games. Interestingly, despite these layoffs, tech giants reported strong earnings last week, causing their stocks to soar. Meta, in particular, benefited from lower costs, which investors found favorable.
Snap is set to release its financial results for the fourth quarter and full year on Tuesday after the market closes. The company’s stock experienced a decline of over 3.7% during Monday morning trading.