Snap lays off 10 percent of its workforce

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Snap, according to a new SEC filing, is laying off 540 of its workforce, which represents 10 percent of its total staff strength. 

According to Snap, the layoffs would “best position our business to execute our highest priorities” and ensure it has “the capacity to invest incrementally” over time. The company told us the layoffs were necessary to “reduce hierarchy and promote in-person collaboration.

Snap said it would be issuing severance packages to the affected employees, though there is no specific information regarding what would be included. A Snap spokesperson confirmed to Engadget that it is “focused on supporting our departing team members.”

Citing restructuring and plans to focus on its three priorities, Snap in 2022 laid off 20 percent of its workforce. The company also canceled its original shows, in-app games, and several other projects. All these are part of Snap’s plans to cut costs and refocus its business.

Company CEO Evan Spiegel, in a memo as cited by The Verge, wrote that Snap is “restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality.”

Spiegel said Snap’s revenue growth had recovered to 8 percent from being flat in late July, which is short of saying things were beginning to get back on track. Of course, this is nothing compared to the 40 percent revenue growth it was recording prior to Russia’s invasion of Ukraine. Snap said it expects the layoff to save it $500 million in costs every year.

Prior to that announcement, Snap announced that its Pixy Drone would no longer be available. Snap’s decision to sunset the flying selfie camera just four months after it was launched was based on economic reasons.

Citing people familiar with the matter, Snap’s decision was based on the company’s plans to adjust plans during the economic downturn.

Speaking to staff during a regular question and answer session, Snap’s Chief Executive Evan Spiegel said the plan to discontinue the flying selfie camera is part of a wider reprioritization of its resources.

There is no public data on the number of sales made within the last four months, so it is a bit difficult to measure its market performance while production lasted.

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Author: Ola Ric

Ola Ric is a professional tech writer. He has written and provided tons of published articles for professionals and private individuals. He is also a social commentator and analyst, with relevant experience in the use of social media services.

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