Snap is laying off about 10% of its employees worldwide, the social media company announced Monday, becoming the latest tech company to start the year off by cutting some of its workforce.
Key Takeaways
- More than 500 employees will be laid off as part of Snap’s latest round of cuts in order to “best position our business to execute on our highest priorities,” according to a regulatory filing.
- The cuts will result in pre-tax charges of $55 million to $75 million for severance and related costs, as well as $45 million to $55 million in future cash expenditures, Snap said.
- Snap told Forbes it is “reorganizing” its team to “reduce hierarchy and promote in-person collaboration.”
What We Don’t Know
The exact number of employees being laid off is unclear. Snap’s last public headcount was 5,367, according to the company’s quarter three earnings press release.
Big Number
Nearly 24,000. That’s how many tech workers have been laid off from companies such as Okta, Zoom, Microsoft and more since the start of the new year, CNBC reported.
Key Background
This is the latest set of job cuts in a string of layoffs from the social media company. Nearly 20 employees were laid off from Snap in November, and in August 2022, the company cut 20% of its workforce in an effort to restructure. The social media company is combatting a few issues. It’s popular with a younger demographic and it has been difficult for the company to gain traction with other age groups.
Snap is also dependent on ad revenue and has struggled in recent years to increase sales. But the biggest problem Snap faces is that monetizing social media platforms that are primarily used for messaging purposes is difficult, Angelo Zino, senior equity analyst at CFRA Research told CNN in the fall. Meanwhile, just months after announcing an augmented reality service for business, Snap closed the division last fall because the cost and complexity of the concept was too much for the company to take on, CEO Evan Spiegel reportedly said in a memo.
Tangent
Snap isn’t the only tech company making cuts in the new year. iRobot announced it was cutting some 350 jobs last month, the live streaming site Twitch cut about 500 employees from its workforce and Microsoft laid off 1,900 employees.
What To Watch For
Snap’s quarter four earnings will be released Tuesday.
This article was first published on forbes.com and all figures are in USD.
