Snap Inc. is the latest tech company to initiate mass layoffs, as the company announced Monday that it plans to lay off 10% of its total global workforce, or about 500 employees.
“In order to best position our business to deliver on our top priorities and to ensure the ability to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team,” the company said in a document filed with the U.S. Securities and Exchange Commission on Feb. 5.
Snapchat’s parent company said it expects to incur charges of between $55 million and $75 million in the first quarter of 2024 due primarily to severance costs.
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The layoffs will last until the second quarter of 2024, depending on labor laws in some countries where the staff are located.
Snap Inc. had a strong third quarter in 2023, with quarterly revenue of $1.19 billion (up 5% from the second quarter) and gaining 9 million daily active users over the same period.
Earlier this year, CEO Evan Spiegel sent an internal memo to employees about how the company had “reached a true inflection point” and planned to use the remainder of 2024 as “an opportunity to leverage all the momentum” that he believed the company had developed. .
“Technology will not disappear,” Spiegel wrote. “It is our responsibility to make it more human, more natural, and more seamlessly integrated into our lives so that we can benefit from its positive potential while avoiding the pitfalls. It’s not just an exciting opportunity: it’s existential.”
The company has struggled with declining revenue over the past two years, most recently cutting 20% of its staff in August 2022 after nearly doubling its workforce during the pandemic.
The company did not specify which departments would be most affected by this round of layoffs.