Snap plans to lay off about 20 percent of its more than 6,400 employees, according to people familiar with the matter.
The layoffs, which Snap has been planning for the past few weeks, will begin Wednesday and will hit some divisions harder than others, the people said. For example, a team working on ways for developers to create mini apps and games at Snapchat will be heavily impacted. Zenly, the social mapping app Snap bought in 2017 and has since run separately, will also see deep cuts.
Another team seeing layoffs is Snap’s hardware division, which is responsible for its AR Spectacles glasses and Pixi camera drone, which was recently canceled after just a few months on sale. The company’s ad sales organization is also being restructured, with Snap’s chief business officer Jeremy Gorman leaving to run ads for Netflix.
Russ Caditz-Peck, a Snap spokesman, declined to comment on the layoffs.
While the scale of the layoffs is significant, it shouldn’t come as a surprise: Snap’s stock price has lost nearly 80 percent of its value since the start of the year, and the company said in May it would slow hiring and work. For ways to cut costs. It reported dismal earnings for the second quarter and said it would not forecast results for the third quarter.
Like its other tech peers, Snap has been hiring aggressively during the pandemic. It entered March 2020 with about 3,427 full-time employees and ended the last quarter with 6,446, a 38 percent increase compared to the same time last year. And in May 2021, the company made its biggest acquisition yet, buying WaveOptics, a supplier of the AR displays used in its latest glasses, for over $500 million.
The problem is that Snap’s business hasn’t survived the pandemic, due to recession fears and difficulty navigating Apple’s crackdown on ad tracking across iOS apps. Snap’s user base continues to grow strongly — it has 347 million daily users, more than Twitter — but it has only turned a profit once since going public in 2017.
Update August 30, 5:30PM ET: Snap’s chief business officer is leaving for Netflix, the company added.