Snap Inc to cut 10% of Snapchat workforce following revenue decline

Snapchat parent company Snap is the latest tech firm to announce job cuts amid an industry downturn. On Monday, Snap revealed plans to lay off around 10% of its global workforce, the second round of redundancies in less than a year.

The move comes after Snap dismissed some 20% of staff in 2022 and a further 3% in early 2023. At the start of this year, Snap employed approximately 5,300 people worldwide. The company did not specify which teams or regions would be impacted but said the cuts would "best position our business" and provide funds to invest in strategic priorities.

Affected employees will be notified soon, with Snap expecting around $75 million in severance costs. The cuts follow consecutive revenue declines in Q2 and Q3 2022, despite 3% growth in Q3 2023. Snap has struggled with several underperforming products like Spectacles AR glasses, the Pixy selfie drone, and its Snapchat+ subscription.

CEO Evan Spiegel has set bold targets for 2024, including 17% user growth, 20% ad revenue increase, and doubling paying Snapchat+ subscribers from 7 million currently. But Snap has so far been unable to meet its own goals and continues losing money.

The layoffs come amid a wave of redundancies across tech giants like Meta and Google as firms balance cost-cutting with remaining competitive. According to layoffs.fyi, over 232,000 tech jobs were cut in 2023, with over 30,000 lost in January 2024 alone, indicating more pain ahead.

While necessary for profits, the cuts highlight the precarious state of even leading tech firms like Snapchat in today's uncertain economic environment. How Snap manages this transition and restructures its operations will be pivotal to its future growth prospects.