Photo Credit: Neelabh Raj
Snap Inc. has announced a round of layoffs that will impact an expected 20% of the company’s operations.
According to a report from The Verge, Snap Inc. is seeking to downsize by cutting 1,000 jobs. Layoffs begin today, according to the report, and impact certain departments over others – mainly hardware and developer products. Snap Inc. has clocked a difficult year as the company presented a disappointing earnings report in Q2. In that letter, Snap Inc. announced it would not provide guidance for Q3 as “forward-looking visibility remains incredibly challenging.”
Snap’s hardware division brought the AR Spectacles glasses alive, with a camera drone as its most recent launch. The Pixy camera drone was released in April 2022, but Snap Inc. axed the development after just four months. The $230 drone could film footage that syncs to the Snapchat app for easy sharing with friends. Snapchat also partnered with Live Nation in April to enhance the experience of concert and festival goers with AR experiences.
Fans at select concerts can use the Snapchat camera to launch and view AR experiences at venues. The AR experiences are built into the experience of attending the show, aimed at helping attendees create more digital memorable moments. Some of the festival partners for that endeavor include Lollapalooza Chicago, Wireless Festival in London, Rolling Loud in Miami, and The Governors Ball in New York. Electric Daisy Carnival in Las Vegas was the first concert launch partner.
Snap Inc.’s fortunes are part of a broader downturn for social media companies as a whole. In July, Bloomberg reports more than $130 billion was collectively wiped from social media companies’ stock value. Twitter, Snap, Pinterest, Google parent Alphabet, and Facebook parent Meta all saw declining stock prices as Big Tech continues its 2022 downturn.
SNAP stock is down more than 80% in 2022, but the stock saw a brief rise after the announcement of the layoffs. Snap Inc. has a workforce of 6,000. CEO Evan Spiegel told employees the restructure comes to refocus the company.
“While we have built substantial capital reserves and have made extensive efforts to avoid reductions in the size of our team by reducing spend in other areas, we must now face the consequences of our lower revenue growth and adapt to the market environment,” Spiegel told CNBC News about the restructure. “We are restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality.”