The California-based social media company will prioritize “in-person collaboration” following several rounds of job cuts in recent years
Snap Inc., the owner of Snapchat, is reducing its worldwide workforce by about 10%, or roughly 530 employees, joining a string of tech companies announcing layoffs.
“We are reorganizing our team to reduce hierarchy and promote in-person collaboration. We are focused on supporting our departing team members,” read a statement from Snap Inc. to CNBC.
According to a regulatory filing, Snap Inc. expects to incur charges of $55 million to $75 million, primarily for severance and related costs.
The Santa Monica-based social media company has undertaken multiple rounds of job cuts in recent years. In August 2022, Snap announced plans to eliminate approximately 20% of its global workforce. In the third quarter of 2023, it began winding down its AR Enterprise business, resulting in a global employee headcount reduction of around 3%, as stated in a regulatory filing. On Friday, the company issued a recall for its Pixy drone due to fire risk from overheating batteries.
Snapchat averages 406 million daily users, as per Snap’s website, and boasts over 7 million Snapchat+ subscribers.
Snap is one of several tech companies announcing layoffs. Microsoft is laying off approximately 1,900 employees in its gaming division, according to an internal company memo. Last week, eBay laid off 1,000 employees, about 9% of its workforce; PayPal, 2,500; and in mid-January, Google cut 1,000. Other companies that have announced layoffs include TikTok, Amazon divisions Twitch, Audible, and Riot Games. Despite multiple waves of layoffs, tech giants reported strong earnings last week, leading to a surge in their stocks, particularly Meta, as investors viewed reduced costs as a positive development.
Snap is set to report its fourth-quarter and full-year financial results on Tuesday after the market close. Its stock declined more than 3.7% in Monday morning trading.
