Snap To Cut 10% of Its Workforce Across the Globe

Around 500 Snap workers will be impacted across the globe as part of the company’s latest layoffs, according to CNBC.

Snap Inc., the creator of Snapchat, the American multimedia instant messaging platform, will be downsizing its workforce partially to “promote in-person collaboration.”

The company’s shares dropped by 3% in Tuesday morning trading and experienced some movement before closing down by 1.8%. Snap has carried out a number of layoffs since 2022, with the latest round of cuts in November 2023, when it slightly downsized its product department.

According to a regulatory filing, the social media company also expects to incur charges from around $55 million to $75 million.

In 2022, Snap scrapped a number of its projects and made its biggest layoffs, with around 20% of its workforce (around 6,000 staff) impacted, and following that, it restructured its business lines.

A Snap spokesperson told CNBC, “We are reorganizing our team to reduce hierarchy and promote in-person collaboration. We are focused on supporting our departing team members.”

Snap joins the long list of tech companies making job cuts this year. Last week, PayPal announced layoffs of around 9%, and at the start of the year, Google CEO Sundar Pichai warned that job cuts were on the way. Additionally, eBay announced it was laying off 1,000 workers, Amazon said it would reduce its workforce by hundreds, and Duolingo has already laid off around 10% of its contractors as it transforms to implement more artificial intelligence.

In total, around 24,000 workers in the tech space lost their jobs in January. We’re only a few days into February, and already Zoom and cybersecurity and identity company Okta have let go of staff.

Last week, Snap CEO Evan Spiegel — as well as other leaders of social media companies, such as Meta’s CEO Mark Zuckerberg, TikTok’s CEO Shou Zi Chew, and X’s CEO Linda Yaccarino — testified before the Senate Judiciary Committee over scrutiny around the damage its platform caused young people.

On the whole, investors back tech companies’ plans to complete layoffs. For example, Meta implemented a “year of efficiency” that saw brutal cuts to its workforce. The Facebook owner’s stock reached an all-time high after it reported strong earnings and announced its first-ever dividend.

Snapchat’s revenue is heavily reliant on digital advertising spend, much like Facebook and Google. In the latest quarter, the company saw a drop in revenue, and it has also started a $500 million share buyback program.