The parent company of the Snapchat social network, Snap, announced on Monday February 5 the elimination of around 528 jobs, or 10% of its global workforce. In a press release, the company announces that it has taken “the difficult decision to restructure [son] team “ in order to have “the ability to gradually invest to support [sa] growth over time ». Following this announcement, Snap shares fell 1.7% in early trading on the New York Stock Exchange.
Structurally loss-making and while the economic context is complicated for tech companies, Snapchat had already announced a social plan for 1,200 people in August 2022 – or 20% of its workforce.
Last spring, Evan Spiegel, who co-founded Snap in 2011, was pleased to have 750 million users each month, “including the vast majority of 13-34 year olds in more than twenty countries”. Unlike Meta (Facebook, Instagram, WhatsApp), Snap has never managed to earn enough advertising revenue to generate an annual profit.
Gloomy context in tech
Its products like Spotlight and the Snapchat + subscription service have not performed as expected. In 2022, its net losses tripled to $1.43 billion. The Californian group is due to present its quarterly and annual results on Tuesday. If Snapchat has built its success on ephemeral videos and photos, the company has not succeeded in diversifying into electronic equipment, such as connected glasses.
This announcement comes against a gloomy backdrop for tech companies in recent months. In December 2023, Spotify announced the layoffs of 1,500 people, or 17% of its workforce. In the United States, Meta and Microsoft have announced plans to cut at least 10,000 people each. In January 2023, Amazon also announced the elimination of more than 18,000 positions and Google’s parent company, Alphabet, around 12,000 positions.