Snapchat To Lay Off 1,300 Employees; Is Snap’s End Near?

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Tech firms have taken a hit and struggling to perform at their peak due to the recession,which is ringing concerns amongst employees. Recently, Microsoft was in the headlines for cutting 2% jobs of its entire workforce. Seems like Snapchat is following the lead and is reportedly laying off a bulk of its employees. The photo-sharing app's parent company Snap is reportedly making this move in a bid to structuralize its current workforce.

 
Snapchat To Lay Off 1,300 Employees; Is Snap’s End Near?

What's With The Snapchat Job Cuts?

Snapchat's parent company is reportedly sacking off around 20 per cent of its entire workforce going forward. "The headcount reduction is part of a broader strategic reprioritization by the company to focus on our top priorities, improve cost efficiencies, and drive toward profitability and positive free cash flow", said Snapchat in a report to investors.

Jerry Hunter, Senior Vice President of Engineering, will be promoted to the newly-created role of Chief Operating Officer. Mr. Hunter has served Snapchat as Senior Vice President of Engineering since November 2017.

"In Mr. Hunter's new role, he will oversee our engineering, sales, partnerships, and revenue organizations. In connection with Mr. Hunter's promotion, he will be awarded $19.5 million in new restricted stock units that will vest over the next 39 months in equal quarterly increments", said Snapchat in the report.

Snapchat has also posted an Investor Update presentation to the company's Investor Relations website at investor.snap.com.

Currently, Snapchat has a workforce of around 6,500 employees. This isn't an instant move by Snap, rather, the photo-sharing app's parent company has been planning to execute this for the last few weeks.

Snap has started the layoff process and will be laying off employees from some specific departments and not all the teams. The major impact will be on the company's developer team which is dedicated to designing and developing mini apps and games for the Snapchat app.

Additionally, the reports suggest Zenly, which is a social messaging from Snap introduced back in 2017 will also have a deeper impact with the job cuts. Just to recap, Snap introduced Zenly back in 2017 and has been operating as a separate entity from Snapchat. Snap has also discontinued the Pixy drone development which it announced back in April 2022.

 

Furthermore, Snapchat has been aggressive with the hiring process during the pandemic. However, the brand has been experiencing a tough year and has not achieved its target in terms of its revenues. This has been the case in the second quarter which the company revealed in its Q2 investment letter.

Speaking of the figures, a report from Bloomberg cites Snap's shares dropped down over 2.5 yesterday in New York that accounting for a total of 79 per cent this year. The brand has recorded over $422 million loss in Q2, 2022.

Source

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