More Snap workers are vanishing from the Snapchat parent’s employee roster.
On Monday (Feb. 5), Snap announced plans to lay off 10% of its global full-time employees. “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,” Snap said in an SEC filing.
The 10% figure represents about 540 employees out of the 5,367 the company most recently reported as of the end of the third quarter of 2023.
The latest job cuts come after Snaplaid off 20% of its workforce, nearly 1,300 employees,in August 2022 and announced the shutdown of several initiatives, includingending Snapchat original series. In November 2023, in a much smaller round of layoffs, Snap said it let go about 20 product managers.
For Snap, the layoffs are part of efforts to curb costs and return to profitability. In early 2024, job cuts have swept across multiple industries as companies look to reduce expenses, including among tech players like Google (including YouTube) and Amazon (including Prime Video, Twitch and Audible). Microsoft, meanwhile, last month axed 1,900 jobs in its gaming division, almost 9% of its employee base, after closing its massive deal to acquire Activision Blizzard.
Snap said that as a result of the layoffs announced Monday, it estimates the company will incur pre-tax charges of $55 million to $75 million, primarily consisting of severance and related costs, and other charges, of which $45 million to $55 million are expected to be future cash expenditures. The majority of those costs are expected to be incurred during the first quarter of 2024, Snap said.
Snap is scheduled to report fourth-quarter 2023 results Tuesday, Feb. 6, after the market closes.
For Q3, Snap edged out Wall Street expectations with revenue of $1.19 billion (up 5%) and a net loss of $368 million (or 23 cents per share), touting improvements in its ad-serving platform. Snapchat netted 9 million new daily active users in the period, to stand at an average of 406 million.
For Q4, the company told investors it expects revenue to be $1.32 billion-$1.375 billion, implying year-over-year revenue growth of 2% to 6%. Snap in part cited the Israel-Hamas war for “limited” visibility into ad demand for the year-end quarter, saying it “observed pauses in spending from a large number of primarily brand-oriented advertising campaigns immediately following the onset of the war in the Middle East.”
