The company behind Snapchat, Snap Inc. have recently announced their Snap layoff and joined the line of tech giants such as TikTok, Microsoft, Google, Spotify, LinkedIn and others that had their workforce reductions. The layoff trend seems to continue this 2024 with Snap Inc. being the most recent one. This decision, reflective of broader trends in the tech sector, underscores the dynamic nature of the industry and the strategic shifts companies undertake to stay competitive. Let’s delve into the details of this recent Snap layoff.
The Details Behind This Snap Layoff
Snap Inc. have faced ongoing challenges in translating their popularity among young users into sustained revenue growth. They strive to compete with larger competitors such as Meta Platforms, the owner of Facebook, which recently issued their inaugural dividend and underwent workforce reductions in the preceding year.
Snap intend to reduce their workforce by approximately 10%, grappling with challenges posed by declines in the digital advertising market. At the commencement of 2023, the company employed about 5,300 individuals. Notably, Snap had previously implemented significant staff reductions, amounting to a 20% cut in 2022 and a more modest 3% reduction in 2023.
The shares of the company behind Snapchat experienced a decline of up to 3% during morning trading, which later reduced to a closure down of 1.8%. Since 2022, the company has undergone several rounds of layoffs, with the most recent occurring in November, resulting in the reduction of a few product employees.
You Might Be Interested: Sheryl Sandberg Steps Down: Reflecting on a Significant Legacy and the Bright Future at Meta
According to a regulatory filing, Snap anticipate incurring expenses ranging from $55 million to $75 million. The company’s previous significant layoff initiative took place in August 2022, during which it terminated 20% of their workforce and reorganised their business divisions.
The social media platform joins the ongoing trend of tech companies implementing cuts in 2024. In January alone, nearly 24,000 tech professionals lost their jobs. Already this month, cybersecurity and identity firm Okta, along with Zoom, have initiated staff layoffs.
Also Read: Visualising Zoom Calls on Apple Vision Pro: A Sneak Peek Before February 2024
Why This Snap Layoff?
In the interim, the organisation encountered similar difficulties to other technology and media firms in recent times, including a diminishing advertising market and addressing the constraints imposed by Apple on user tracking in iOS. Although the company witnessed a revenue increase in the third quarter of 2023, this followed two consecutive quarters of decline.
Marching in February 2024, Evan Spiegel, the CEO of Snap, has outlined ambitious objectives for 2024. The company aims to increase daily users by approximately 17%, boost ad revenue by 20%, and double the number of Snapchat Plus subscribers from the current 7 million, as reported by The Verge in October. However, Snap have consistently failed to meet their internal targets while experiencing a depletion of cash reserves.
According to The Verge, a Snap spokesperson, Farrin Jay, stated in an email to them: “We are restructuring our team to streamline hierarchy and encourage face-to-face collaboration. Our primary focus is on assisting departing team members, and we deeply appreciate their dedication and numerous contributions to Snap.”
More on Snapchat: New Snapchat AI Feature: Users Can Now Share AI-Created Snaps
Final Say on the Snap Layoff
In conclusion, the decision by Snap Inc. to implement workforce reductions with a Snap layoff reflects a broader trend within the tech industry. While Snap, like many major tech companies, faces the need to adapt to changing market dynamics and optimise their operations, the implications of these layoffs extend beyond the company themselves.
They underscore the challenges and complexities inherent in the tech sector, where companies must balance profitability, innovation, and the well-being of their workforce. As Snap and other tech giants navigate these shifts, the manner in which they manage workforce reductions will undoubtedly shape perceptions of their corporate responsibility and long-term sustainability.
Read Next: Amazon Layoffs and Getting Rid of Their Gaming Content Channel: 180 Jobs Affected Abruptly