Snapchat setting stage to lay off employees
Snapchat last laid off employees in 2018 after its disastrous app redesign
Its other hardware ventures, Spectacles and Pixy released to mediocre reviews
Snapchat joins a long list of tech companies that are laying off employees to prep for recession
The incoming US recession has claimed another casualty as Snapchat lines up its plans to lay off an unknown amount of employees, according to tech news website The Verge.
The news was inevitable. Thanks to Apple's "Ask App Not to Track" feature, businesses like Google, Facebook, Instagram and Snapchat are finding it harder to effectively use targeted advertising, which is also being reflected in their finances.
In addition, Snapchat hasn't been doing so well in the last few years. The image sharing company has been burning cash ever since it was founded and has only recorded a profit in one quarter since the company went public in 2017. This year's second quarter financial results weren't promising either and the forecast for the third is looking grim as Snapchat's share prices keep plummeting.
The amount of people being cut hasn't been made clear yet, but significant cuts are likely to be on the way for the company's 6000 employees. The last time the app made such cuts was in 2018 when the company made some unpopular changes to its user interface and experience, causing power users like Kylie Jenner to publicly make their distaste for the app known.
Thanks to her tweet about the redesign, Snapchat lost a fifth of its valuation in just a day, forcing the company to lay off "just over" 120 employees as it struggled desparately to regain that lost value. Despite that, the company boasts 347 million daily active users, beating the likes of Twitter, which is currently embroiled in a legal battle with Tesla's co-founder Elon Musk.
Despite the declining ad revenue, Snapchat has been attempting to diversify into other markets with their release of the $280 selfie drone Pixy and the Spectacles, which records video through a mounted camera on the glasses. Both have been met with a lukewarm response.
Snapchat is the latest in a long line of companies that have announced cutbacks, layoffs and reduced hiring targets as Silicon Valley worries about rising inflation, investor apprehension