'We are reorganizing our team to...': Snapchat's parent company plans 10% global workforce reduction
The social media giant also indicated that it anticipates incurring approximately $55 million to $75 million in expenses associated with the restructuring, primarily stemming from severance costs.
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FollowIn a recent move, social media giant Snap, the parent company of Snapchat, has declared plans to lay off approximately 10% of its global full-time employees, equating to around 500 jobs. This disclosure came through a regulatory filing on Monday, as reported by CNN. Snap emphasized that the restructuring aims to "reduce hierarchy and promote in-person collaboration."
A Snap spokesperson informed CNN, "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."
The regulatory filing shed light on the company's strategic intent behind the layoffs, stating, "best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time." However, Snap acknowledged that the process would be "subject to local law and consultation requirements" in each country, possibly extending the duration of the restructuring.
Snap estimates incurring costs ranging from $55 million to $75 million related to the restructuring, primarily consisting of severance expenses. As of October 2023, the company had a workforce of approximately 5,367 full-time employees.
This marks the second wave of significant layoffs for Snap, following a 20% reduction in its workforce in August 2022. Additionally, the company had cut around 3% of its staff last year, coinciding with the announcement of the closure of its AR Enterprise business.
The tech sector at large has experienced a tumultuous period since 2022. According to data from layoffs.fyi, which tracks job losses in the tech industry, there were more than 232,000 job cuts in 2023 alone. In the current year, approximately 30,000 workers in the tech sector have already lost their jobs, according to the same data.
Commenting on the industry trends, layoffs.fyi founder Roger Lee stated, "Tech companies are still trying to correct for their over-hiring during the pandemic surge, given that the high interest-rate environment and tech downturn have both lasted longer than initially expected."
He added, "This year's layoffs are typically smaller and more targeted than the layoffs a year ago." The ongoing adjustments reflect the industry's efforts to align with evolving economic and market conditions.
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