Snap is cutting 10% of staff as social media copes with ad slump
Bloomberg News ,
Snap Inc. is reducing its workforce by roughly 10 per cent worldwide, joining the chorus of technology companies that have announced a fresh round of cuts since the start of the year.
The social-media company estimated that the reductions will result in pre-tax charges of US$55 million to $75 million from severance and related costs, as well as other charges including $45 million to $55 million in future cash expenditures. Most of these costs will occur in the first quarter, Snap said in a filing Monday.
Snap said the cuts are being made to “best position our business to execute on our highest priorities.”
Like its social media peers, Snap has been working to offset a deceleration in ad revenue, coping with the slump by cutting jobs and culling projects that are no longer seen as a priority.
Just four months ago, Snap announced it was closing a division focused on making augmented reality services for businesses, pulling the plug on what was its latest attempt to diversify the ad-dependent company. Shuttering the business was expected to cut 170 jobs.
The company employed about 5,400 workers as of September. A 10-per-cent reduction based off that total would amount to about 540 jobs lost.
Snap said the mass layoffs may extend into the second quarter of 2024 while the company works to comply with local laws
Snapchat owner Snap Inc to cut more
than 500 jobs
Sky News
Mon, 5 February 2024
The owner of Snapchat has become the latest tech firm to announce job cuts.
Snap Inc said it would shed approximately 10% of its workforce - around 530 employees - with most of the roles expected to go in the first quarter.
The disclosure was made in a regulatory filing, which also revealed the company expects to face charges of up to $75m (£60m) in severance payouts and other related costs.
The California-based firm employs more than 5,300 staff globally, including around 500 in the UK.
A Snap spokeswoman told Sky News it was unable to say at this stage if any posts at its London offices would be affected.
She added: "We are reorganising our team to 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."
Snap Inc previously announced plans to cut around 20% of its workforce in 2022.
Around 406 million people use Snapchat every day on average, according to the firm. It also has more than 5 million Snapchat+ subscribers.
Other tech companies to announce job losses recently include Microsoft, which plans to shed 1,900 employees and online retailer eBay, which is planning to cut 1,000 roles.
Meta, the owner of social media brands Facebook and Instagram, also announced 10,000 redundancies last year.
Shares in Snap fell 4% following the announcement on Monday.
The firm is due to reveal its fourth quarter results on Tuesday.
No comments:
Post a Comment