Social media giant Snap Inc., the owner of Snapchat, announced another round of layoffs, this time eliminating roughly 10% of its global workforce, or about 530 employees. This move follows a string of similar actions by the company in recent years, reflecting broader trends in the tech industry grappling with economic uncertainties.
“We’re streamlining our team to flatten hierarchies and foster stronger in-person collaboration,” stated Snap Inc. in a press release, emphasizing its commitment to fostering a more physical work environment. The company expects to incur severance and related costs ranging from $55 million to $75 million.
This is Snap’s most recent round of workforce reductions. In August 2022, they planned a 20% global workforce cut, and in Q3 2023, they shut down their AR Enterprise business, resulting in a further 3% headcount decrease. These actions come amidst other challenges, including a Pixy drone recall due to battery overheating issues.
Despite boasting 406 million daily users and over 7 million Snapchat+ subscribers, Snap hasn’t been immune to the industry’s struggles. They join companies like Microsoft (1,900 layoffs), eBay (1,000), Paypal (2,500), and Google (1,000) in recent workforce reductions. Interestingly, despite these cuts, some tech giants, like Meta, have seen their stock prices rise, with investors valuing the cost-cutting measures.
Snap’s financial results for Q4 and full year ending December 21st 2003 saw the company report a slight increase in revenue and a reduction in net losses, indicating a challenging yet stable performance in a competitive advertising market.
This news highlights the ongoing challenges faced by the tech industry and its workforce, with companies navigating economic pressures and adapting to changing work environments. Whether Snap’s focus on in-person collaboration will prove successful in the long run remains to be seen.
