Snap Inc., the American company behind the popular multimedia messaging app Snapchat, has decided to cut 10% of its workforce. In practice, as many as 530 employees will lose their jobs. According to company representatives, the measure responds to the “complex situation in the technology sector, which has recently faced many challenges.”
Snap has struggled to fully utilize its popularity among the younger generation and transform it into a stable revenue source. The company has also faced stiff competition from more prominent market players, including Meta Platforms, which owns Facebook and Messenger.
In August 2022, Snap announced its intention to lay off approximately 20% of its workforce. By the third quarter of that year, the purge continued with the termination of the AR Enterprise division, which further reduced the number of employees by three percent. According to Reuters, the main reason for layoffs is ongoing economic uncertainties.
Company representatives have estimated that the planned layoffs will lead to significant costs. These are expected to reach between 55 and 75 million US dollars, roughly 1.3 to 1.7 billion crowns in conversion. Despite having an average of 406 million active users daily and over five million subscribers, it appears that Snap is still unable to support such a large number of employees.
In closing, the technology sector has seen many job cuts recently, with over 262,595 jobs eliminated in 2022 alone. This year, we have already seen 32,496 job cuts in 123 tech companies in the first month. As the sector grapples with various challenges, more companies may follow suit.