Snap announces plans to cut around 10% of its workforce

Snap, the parent company of Snapchat, has announced plans to cut around 10% of its workforce. The company had approximately 5,000 employees in November 2023, suggesting that about 500 employees will face redundancy. This comes just before the release of Snap's fourth-quarter results, following a net loss of $368m in the previous quarter. According to Snapchat, the job cuts are intended to reduce hierarchies and encourage more in-person collaboration. The company expressed gratitude for the hard work and contributions of the departing team members. It remains uncertain whether any of the cuts will affect employees in the UK, where Snap employs more than 500 people. Analysts are concerned about the state of Snap's business, particularly comparing it to Meta's latest results, which showed significant profits and growth. Snap's advertising revenues have been slow to recover from the digital ad slowdown. This is the second round of layoffs from the company following a 20% reduction in the workforce in August 2022. Snap has made efforts to expand beyond Snapchat, including developing augmented reality glasses, but has struggled to find a broad market. Other technology companies, including Meta and Google, have also faced the challenge of balancing cost-cutting measures with competitiveness. In 2023, the tech sector experienced over 232,000 job cuts, according to layoffs.fyi. Last week, Snap's CEO, Evan Spiegel, appeared alongside executives from other social media platforms at a US Senate hearing on child safety online. Spiegel highlighted that Snapchat was created as an alternative to platforms with permanent and public content subjected to popularity metrics. The layoffs were announced in a filing with the US Securities and Exchange Commission. While the company stated that the cuts would affect staff globally, it did not provide further details on specific roles or locations. Snap estimated that the restructuring could result in severance payments and other charges totaling between $55m and $75m.