Snapchat will lay off 1,200 employees, or 20% of global staff. Snap Inc., the parent company of the widely used app Snapchat, has revealed that it intends to lay off around 20 percent of its more than 6,400 employees located across the globe.
The announcement comes at a time when overall economic conditions have deteriorated in recent months as a result of growing inflation and interest rate hikes by the Federal Reserve. The news will have an impact on the jobs of more than 1,200 staff members at the technology giant. The most recent downturn in the market has been particularly hard on the IT industry. For the past few months, headlines have been dominated by reports of hiring freezes, layoffs, and other cost-cutting measures being implemented.
Evan Spiegel, the CEO of Snap, made the announcement in a statement that was released on Wednesday and was shared with CNN Business. In the statement, he said that the company is restructuring in order to concentrate on “three strategic priorities: community growth, revenue growth, and augmented reality.”
As a direct consequence of this, Spiegel’s statement continued, “as a result, we are terminating numerous projects, reducing the size of our staff by approximately 20 percent, and announcing the appointment of Jerry Hunter to Chief Operating Officer.”
The chief executive officer went on to say: “Changes of this size are almost always tough, and our primary emphasis right now is on assisting the members of our team who are leaving through this period of transition. We are indebted to them for all of the contributions they have made to Snap.”
A document that Snaps made with the United States Securities and Exchange Commission during the second quarter of 2022 stated that the company had 6,446 full-time employees.
Since the beginning of the year, the price of Snap stock has dropped by more than 75 percent. Last month, shares of Snap experienced a significant decline after the business reported disappointing growth in revenue and cautioned investors that the economy had deteriorated at a faster pace than had been anticipated.
In a separate memo to Spiegel employees, which was also made available to the public online, the chief executive stated that leaders will notify those who are affected as quickly as they can.
“We will provide at least four months of compensation replacement in the United States, as well as financial assistance to enroll in COBRA,” he wrote, “so that team members will have until the end of the year to find new opportunities while still receiving compensation and health benefits from Snap.” In other words, team members will be able to continue receiving compensation and health benefits from Snap until the end of the year.
In addition, he emphasized that the “extent of this reduction” ought to “significantly reduce the probability of ever having to do this again.”