Snapchat will be laying off approximately 20% of its employees, The Verge reported. The social media company currently has 6,400 employees.
The photo-sharing company has been prepping itself for layoffs after a particularly rough beginning to the year. The job cuts will begin on Wednesday and is likely to impact some departments more than others, according to the Verge report. The teams working on developing mini-games and apps within the Snapchat are going to be impacted, as well as Zenly, the social mapping app that the company acquired in 2017.
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Other teams expected to be hit by layoffs is the hardware division. The team was responsible for Spectacles, a set of augmented reality glasses which released to mediocre reviews and the Pixy camera drone, which Snapchat has taken off the market thanks to poor sales.
Some of the c-suite executives have seen the writing on the wall for the struggling company, Snapchat’s chief business officer Jeremi Gorman has left the company to go run ads for Netflix.
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Snapchat’s slow spiral is no surprise. The company has been struggling since the year began amid changing consumer behaviour. They reported abysmal earnings in the second quarter and have seen their stock value drop by nearly 80% this year.
Like other companies that run on ad sales, Snapchat has taken a massive hit to their revenue thanks to Apple’s “Ask App Not to Track” technology. Companies like Meta and Google have also been impacted by Apple’s move.
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Similar to how eagerly Silicon Valley hired new employees between 2020 and 2022, Snapchat is facing similar issues with regards to staffing. In March 2020, the company had 3,427 full-time employees according to the Verge. By the same time in 2021, that number had grown to 6,446, nearly double.
In addition, the company made a massive acquisition in 2021, which in hindsight hasn’t been the best investment yet. Snapchat bought WaveOptics, which makes AR displays for $500 million. Ultimately, the image sharing app used the technology that WaveOptics brought with it, to develop the Spectacles.