Snap Will Lay Off Around 20% of Its Workforce
Following months of public financial struggles, Snap finally came forward with a bombshell. In an August 31 memo, CEO Evan Spiegel told staff the company would cut its workforce by about 20%, or more than 1,000 workers. Spiegel cited bleak forward-looking revenue projections and said the major restructuring was necessary to “ensure Snap’s long-term success in any environment.” The company had undergone rapid expansion, nearly doubling since March 2020.
“We must now face the consequences of our lower revenue growth and adapt to the market environment,” Spiegel said.
The writing’s been on the wall for Snap. In the spring, the company said it would slow hiring after its stock plunged nearly 40% in a single day. Months later, in the company’s Q2 earnings, it recorded its weakest ever quarterly sales growth in its six years as a public company. Like other large internet companies, Snap’s suffering stems in larger part from a larger downturn in digital advertising revenues plaguing the tech industry.
