[Global] ‘Approximately’ 10% of Snap employees face redundancy

Snap - the operator of Snapchat - has announced its intention to make "approximately" 10 per cent of its staff redundant, BBC News reports.

In November 2023 Snap had 5,000 employees, meaning around 500 people could potentially lose their jobs.

The announcement reportedly came a day before Snap disclosed its fourth-quarter results. It reported a net loss of $368m (£294m) in the previous quarter in October 2023.

Snapchat said the redundancies would "reduce hierarchy and promote in-person collaboration".

"We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap," a spokesperson told the BBC.

According to the company’s most recent annual report, more than 500 people work for Snap in the UK. It is not yet clear whether any of the cuts will affect UK employees.

Jasmine Enberg - principal social media analyst at Insider Intelligence - told the BBC that these job cuts "don't bode well for the state of Snap's business" ahead of its latest earnings announcement on February 6.

Ms Enberg reportedly highlighted social media rival Meta's latest results - showing quarterly profits tripling year-on-year, a bump in users, lower costs and higher ad sales - as "a tough act for Snap to follow".

"Snap is likely trying to garner some goodwill with investors, who rewarded its competitor for its cost-cutting measures and its continued 'do more with less' mantra going into 2024," Ms Enberg said, adding that Snap's advertising revenues have been "slow to recover from the digital ad slowdown".

This is Snap’s second wave of mass redundancies from the social media company. In August 2022 it laid off around 20 per cent of its workforce.

Snap’s efforts to expand into products beyond Snapchat - such as experimenting with AR glasses, dubbed Spectacles - have floundered. The company couldn’t find a mass market for its other products and subsequently closed a division offering AR services to business customers in 2023.

The latest job cuts come as industry peers, including Meta and Google, grapple with balancing cost-cutting measures with the need to remain competitive.

According to layoffs.fyi - a tracker of job losses in the tech sector - there were more than 232,000 job cuts in the industry in 2023.

Evan Spiegel - Snap's chief executive - was questioned alongside the bosses of X (formerly Twitter), Meta, Discord and TikTok at a US Senate hearing about child safety online, last week. Though senators' attention was reportedly targeted primarily towards Meta chief executive Mark Zuckerberg and TikTok CEO Shou Zi Chew.

In his opening testimony at the hearing, Mr Spiegel stated that he and co-founder Bobby Murphy built Snapchat as an alternative to other social media platforms, where images shared were "permanent, public, and subject to popularity metrics".

Snap reportedly announced the pending redundancies in a filing with the US Securities and Exchange Commission.

The statement said that the layoffs would affect staff globally, however, Snap has yet to specify who would be affected.

"In order to best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team," it said.

In the filing, Snap reportedly said that the cuts would be "subject to local law and consultation requirements" in each country, which could extend the process.

The social media giant estimated that making these redundancies could cost it between $55m (£44m) and $75m (£60m) in severance payments "and other charges".

Source: BBC News

(Links and quotes via original reporting)

Snap - the operator of Snapchat - has announced its intention to make "approximately" 10 per cent of its staff redundant, BBC News reports.

In November 2023 Snap had 5,000 employees, meaning around 500 people could potentially lose their jobs.

The announcement reportedly came a day before Snap disclosed its fourth-quarter results. It reported a net loss of $368m (£294m) in the previous quarter in October 2023.

Snapchat said the redundancies would "reduce hierarchy and promote in-person collaboration".

"We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap," a spokesperson told the BBC.

According to the company’s most recent annual report, more than 500 people work for Snap in the UK. It is not yet clear whether any of the cuts will affect UK employees.

Jasmine Enberg - principal social media analyst at Insider Intelligence - told the BBC that these job cuts "don't bode well for the state of Snap's business" ahead of its latest earnings announcement on February 6.

Ms Enberg reportedly highlighted social media rival Meta's latest results - showing quarterly profits tripling year-on-year, a bump in users, lower costs and higher ad sales - as "a tough act for Snap to follow".

"Snap is likely trying to garner some goodwill with investors, who rewarded its competitor for its cost-cutting measures and its continued 'do more with less' mantra going into 2024," Ms Enberg said, adding that Snap's advertising revenues have been "slow to recover from the digital ad slowdown".

This is Snap’s second wave of mass redundancies from the social media company. In August 2022 it laid off around 20 per cent of its workforce.

Snap’s efforts to expand into products beyond Snapchat - such as experimenting with AR glasses, dubbed Spectacles - have floundered. The company couldn’t find a mass market for its other products and subsequently closed a division offering AR services to business customers in 2023.

The latest job cuts come as industry peers, including Meta and Google, grapple with balancing cost-cutting measures with the need to remain competitive.

According to layoffs.fyi - a tracker of job losses in the tech sector - there were more than 232,000 job cuts in the industry in 2023.

Evan Spiegel - Snap's chief executive - was questioned alongside the bosses of X (formerly Twitter), Meta, Discord and TikTok at a US Senate hearing about child safety online, last week. Though senators' attention was reportedly targeted primarily towards Meta chief executive Mark Zuckerberg and TikTok CEO Shou Zi Chew.

In his opening testimony at the hearing, Mr Spiegel stated that he and co-founder Bobby Murphy built Snapchat as an alternative to other social media platforms, where images shared were "permanent, public, and subject to popularity metrics".

Snap reportedly announced the pending redundancies in a filing with the US Securities and Exchange Commission.

The statement said that the layoffs would affect staff globally, however, Snap has yet to specify who would be affected.

"In order to best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team," it said.

In the filing, Snap reportedly said that the cuts would be "subject to local law and consultation requirements" in each country, which could extend the process.

The social media giant estimated that making these redundancies could cost it between $55m (£44m) and $75m (£60m) in severance payments "and other charges".

Source: BBC News

(Links and quotes via original reporting)