Updated · Sep 26, 2022
Snap to Cut 20% of Workforce, Announces Major Restructuring
Updated · Sep 01, 2022
CEO Evan Spiegel announced the cuts on Wednesday amid plans to restructure the company’s business model.
Speculations have been rife for some time as the company has struggled financially. Finally, Snap has taken the step many anticipated. On Wednesday, the social network company revealed that it would reduce its workforce by 20%.
Chief Executive Evan Spiegel announced the move in a memo to staff. He informed them of the company’s restructuring plans in the face of financial turmoil brought about by rising interest rates and a struggling economy.
“We have made the difficult decision to reduce the size of our team by approximately 20%,” he said. “The scale of these changes vary from team to team, depending upon the level of prioritization and investment needed to execute against our strategic priorities.”
Even with around 500 million average monthly users, Snap has felt the pinch as advertising revenue has dwindled.
In May, Spiegel warned that Snap would miss its revenue targets for the year’s second quarter. In his memo, he lamented that its current year-on-year revenue growth stood at 8% – well below expectations of 20% to 25%.
Facing the Consequences
Spiegel said Snap has made “extensive efforts” to avoid firing staff by cutting spending in other areas but the company must now “face the consequences” of disappointing revenue.
“We are restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality.”
The company has shuttered several products and features, including Snap Minis and Snap Games. It is now initiating the “process of winding down” Zenly Map and the Voisey music feature.
Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.
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