Feb 5, 2024 - Technology

Snap is latest tech company to slash jobs, laying off 10% of workforce

Evan Spiegel, founder and CEO of Snapchat, speaks in Santa Monica, California, on April 19, 2023. Photo: Frederic J. Brown/AFP via Getty

Snapchat parent Snap Inc. will lay off 10% of its full-time staff, or roughly 530 employees, the tech firm said Monday in a regulatory filing.

Why it matters: Unlike other ad-supported tech firms, such as Meta and Google, Snap's stock has not been able to recover from post-pandemic era losses, when the ad market slowed down.

Details: Snap in a statement said the cuts “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.”

  • The company said it had more than 5,300 employees in its last earnings report.
  • The firm said it anticipates it will incur roughly $55 million to $75 million in pre-tax charges “primarily consisting of severance and related costs,“ as well as ”other charges, of which $45 million to $55 million are expected to be future cash expenditures.”
  • The majority of the costs attributed to the changes are expected to be incurred during the first quarter of 2024, Snap Inc. said.

What they're saying: "We are reorganizing our team to reduce hierarchy and promote in-person collaboration,” a Snap spokesperson said.

  • ”We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap."

Be smart: This is the second major round of cuts for Snap Inc. in the past few years.

  • The firm laid off 20% of staff amid a different business restructuring in August 2022.

The big picture: More Big Tech companies are pointing to a renewed focus on AI as a justification for layoffs, Axios’ Megan Morrone reports.

  • Google laid off hundreds of workers in January to focus more on AI.
  • Salesforce, Duolingo and others have also announced cuts or hiring freezes to focus on AI.

What’s next: Snap Inc. Is expected to report its fourth quarter earnings results on Tuesday.

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