Snapchat — Approximately 10% of Staff to be Axed

Snap announces layoffs affecting approximately 500 employees globally amidst financial challenges and industry competition, reflecting broader tech sector trends.

In November 2023, the company stated it had 5,000 workers, indicating roughly 500 might lose their jobs.

This news comes right before Snap reveals its fourth-quarter outcomes. Last quarter, in October 2023, they reported a loss of $368 million (£294 million). Snapchat explained the decision as a means to “flatten the structure and encourage face-to-face teamwork”. A spokesperson expressed gratitude towards departing employees for their dedication.

The company employs over 500 people in the UK, but it’s uncertain if any UK jobs will be affected.

Jasmine Enberg, a social media analyst, believes these layoffs hint at Snap’s challenges before its latest earnings release. She compared Snap’s situation with Meta, its competitor, noting Meta’s growing profits and user base. Snap’s ad revenues have been sluggish in recovering from the digital ad slowdown.

This is the second major layoff by the company, the first being in August 2022, where they cut around 20% of their workforce. Despite efforts to diversify beyond Snapchat, such as experimenting with AR glasses, Snap struggled to find mass appeal for its other products.

The recent layoffs reflect wider industry trends, with tech companies like Meta and Google also implementing cost-cutting measures.

In 2023, the tech sector witnessed over 232,000 job losses.

Snap’s CEO, Evan Spiegel, recently participated in a Senate hearing concerning online child safety alongside other tech leaders. In his testimony, Spiegel highlighted Snapchat’s focus on providing an alternative to platforms with permanent and public content.

The layoffs, disclosed in a filing with the US Securities and Exchange Commission, are expected to impact staff globally. Snap didn’t specify further details about the affected employees but mentioned that the process would comply with local laws.

The company anticipates spending between $55m (£44m) and $75m (£60m) on severance and other charges due to the restructuring.