A statement from Snap says the job cuts will reduce hierarchy and promote in-person collaboration.
Snap, the parent company of popular social media app Snapchat, has become the latest tech company to announce layoffs after revealing plans to cut 10pc of its global workforce.
With more than 5,000 employees globally, the job cuts will affect more than 500 roles in the company as the wider tech sector continues to downsize to cut costs after a hiring spree during the pandemic.
Snap told CNBC in a brief statement yesterday (5 February) that the layoffs are the result of a reorganisation of its team to “reduce hierarchy and promote in-person collaboration” and that the company is focused on supporting its departing members.
The last time major layoffs affected Snapchat employees was in August 2022, when the parent company cut around 20pc of jobs to improve its business performance, which had been lower than expected in its most recent earnings report at the time.
Snap said in its earnings report in October 2023 that it has more than 400m daily active users, adding 43m in a year.
Over 400M daily active users! On today’s earnings call, we shared that we surpassed a major milestone – Snapchat now reaches 406M DAU, an increase of 43 million (12%) year-over-year. Learn more at https://t.co/nDlIAzABkf. pic.twitter.com/79Wm1RkQAr
— Snap Inc. (@Snap) October 24, 2023
Snap CEO Evan Spiegel was one of five tech executives questioned at a US senate hearing last week on the adverse impact of Big Tech on child safety.
The five CEOs – Mark Zuckerberg of Meta, Shou Zi Chew of TikTok, Linda Yaccarino of X, Evan Spiegel of Snap and Jason Citron of Discord – were questioned for nearly four hours.
When one of the senators, Laphonza Butler, asked Spiegel what he has to say to the parents of children who have allegedly been able to access illegal drugs through Snapchat, he apologised, saying, “I’m so sorry that we have not been able to prevent these tragedies. We work very hard to block all search terms related to drugs on our platform.”
News of the layoffs comes just as Snap is due to publish its latest earnings report today. In the previous report, the company was able to break a streak of revenue declines that had left investors weary.
According to CNBC, share values of the Snapchat parent fell by as much as 3pc in the immediate aftermath of the layoffs announcement yesterday.