In a bid to navigate the challenging landscape of the
digital advertising market
,
Snap Inc.
has announced plans to lay off approximately 10 percent (or 500
employees
) of its total global workforce. The
layoff
comes as a part of declines in the ad market and difficulties in expanding beyond its core social networking product.
Snap hasn’t provided the specific areas affected by the layoffs but emphasised that these cuts are intended to "best position our business to execute on our highest priorities" and to provide the capacity for incremental investments in future growth.
Snap’s layoffs and revenue history
It is not the first time that Snap has done job cuts. Back in 2022, the company had slashed 20 percent of its staff in 2022 and had a smaller cut of 3 percent in 2023.
Snap registered a revenue growth in the third quarter of 2023, but it was followed by the revenue decline consecutively in the last two quarters. Also, depite offering a versatile range of services and features it has faced setbacks in several of them including failed
snapchat
AR glasses, selfie drone, Spotlight and Snapchat Subscription service.
Evan Spiegel, Snap's CEO, has set ambitious goals for 2024, aiming to increase daily users by 17 percent, boost ad revenue by 20 percent, and double Snapchat Plus subscribers from the current 7 million. However, the company has consistently fallen short of its internal targets and continues to burn through cash.
The reason behind the declining ad growth could also be due to Apple’s strict restrictions on user tracking on iOS.
Snap's spokesperson, Farrin Jay, stated in an email to The Verge, "We are reorganizing our team to reduce hierarchy and promote in-person collaboration. We are focused on supporting our departing team members and are very grateful for their hard work and many contributions to Snap."
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