Snap to lay off 20% of its workforce

Snap plans to lay off around 20% of its workforce, or more than 1,200 out of more than 6,400 employees, according to sources familiar with the matter cited by The Verge. This wave of layoffs is due to begin this Wednesday, August 31.

At the end of the second quarter, pessimism reigned at Snap. After presenting disappointing results, the parent company of Snapchat did not risk delivering forecasts for the third, preferring to prepare employees and analysts for difficult times. Snap had thus revealed its intention to reduce hiring and said it was considering ways to reduce its costs.

After words, place for action, since the American company plans to lay off around 20% of its workforce, or more than 1,200 people among its more than 6,400 employees, according to sources familiar with the matter cited by The Verge. This wave of layoffs should begin this Wednesday, August 31, specifies the American media. The team responsible for providing developers with the means to create mini-applications and games on Snapchat, as well as that dealing with Zenly, a French application for locating friends which was acquired by Snap in 2017, are the main victims of this bloodletting in the workforce of the company led by Evan Spiegel.

The hardware division of Snap is also concerned, which is not a big surprise since the company had already drawn a line under its Pixy drone-gadget just a few months after its launch. A new failure for this department also at the origin of the Spectacles connected glasses, which have not been much more successful than Snap’s small colorful drone. Also affected by these layoffs, the commercial branch of Snap will lose two senior executives: Jeremi Gorman, commercial director of the company, and Peter Naylor, head of advertising sales in the United States, leaving for Netflix, which is nevertheless going through a complicated period (970,000 subscribers lost in the second quarter).

Snap lost 80% of its value on Wall Street in 2022

Although these cuts are significant, they are not very surprising given the financial health of the American social media giant. In the second quarter, he notably conceded a net loss of 422 million dollars, more than the figure of 359.6 million dollars recorded in the first three months of the year. As a reminder, Snap was already largely loss-making for the whole of 2021, with $488 million in losses. And although the company recruited more than 3,000 people during the Covid-19 pandemic, Snap’s activities suffered from a difficult economic context when the health situation improved significantly.

In difficulty despite the increase in its number of users (347 million daily active users at the end of the second quarter), the Californian company has lost nearly 80% of its value since the beginning of the year. In the wake of the announcement of its quarterly results for the period from April to June, it had seen its capitalization melt by nearly 40% on Wall Street. A fall which should continue this Wednesday after the revelation of this redundancy plan…