Snap plans to lay off around 20% of its more than 6,400 employees, according to people familiar with the matter.
The layoffs, which Snap planned for several weeks, will start on Wednesday and hit some departments harder than others, the people said. For example, the team working on ways for developers to create mini apps and games inside Snapchat will be severely impacted. Zenly, the social mapping app Snap bought in 2017 and run separately since will also see deep cuts.
Another team that will see layoffs is Snap’s hardware division, which is responsible for its AR Eyeglasses glasses and the Pixy camera drone which was recently canceled after being on sale for only a few months. The company’s advertising sales organization is also being restructured with Jeremi Gorman, chief commercial officer of Snap, departure to broadcast commercials for Netflix.
Russ Caditz-Peck, a Snap spokesperson, declined to comment on the layoffs.
While the scale of the layoffs is significant, it shouldn’t necessarily come as a surprise: Snap’s stock price has lost nearly 80% of its value since the start of this year, and the company said in May that it would slow down hiring and look for ways to cut costs. He then delivered disappointing results for the second quarter and said it did not expect third quarter results.
Like its other tech peers, Snap has been hiring aggressively during the pandemic. It entered March 2020 with approximately 3,427 full-time employees and ended the last quarter with 6,446, a 38% increase over the same period last year. And in May 2021, the company made its biggest acquisition ever. by purchasing WaveOpticsthe supplier of the AR displays used in its latest Spectacles, for more than $500 million.
The problem is that Snap’s business hasn’t held up well coming out of the pandemic, due to recession fears and the difficulty it has had navigating Apple’s crackdown on ad tracking. in iOS apps. Snap’s user base has continued to grow strongly – it has 347 million daily users, more than Twitter – but it has managed to turn a profit only once since its IPO in 2017.
Updated August 30, 5:30 p.m. ET: Added that Snap’s Chief Commercial Officer is leaving for Netflix.