Snapchat will lay off 20% of its employees following the fall in the share price
A report from The Verge says Snapchat’s plan to lay off employees will now begin on Wednesday this week, slashing the company’s 6,400 hires by 20%.
(Photo: Drew Angerer/Getty Images)
NEW YORK, NY – MARCH 2: Signage for Snap Inc., parent company of Snapchat, adorns the front of the New York Stock Exchange (NYSE) on March 2, 2017 in New York City. Snap Inc. priced its initial public offering at $17 per share on Wednesday and Snap shares will begin trading on the New York Stock Exchange (NYSE) on Thursday.
The team and developers who worked on “Minis” and the “Zenly” department will experience the employee reduction the most, as the report states. It will also affect the team that worked on the hardware division of the company.
Despite reports from various sources, Snapchat spokesperson Russ Caditz-Peck had no comment on the matter.
Snapchat’s struggles for 2022
The company’s decision came as no surprise to some as its planning was announced earlier this month. Added to this is the drop in Snapchat’s stock price, losing 80% of the company’s value earlier this year.
Following those issues, CEO Evan Spiegel said last May that the company was feeling the effects of rising inflation and interest rates, supply chain and labor disruptions. As a result, 500 employees will only be hired by the company, a far lower number of people when compared to the company’s old target of 2,000.
He said: “Going forward, we will take steps to redefine our investment priorities – continuing to invest in our business priorities, but in many cases at a slower pace than expected given the operating environment.”
When the pandemic hit, Snapchat hired people aggressively, welcoming 3,427 new hires, which boosted its employment rate to 38%. WaveOptics, the provider of AR displays for Spectacles, has also been a factor in the company’s recent troubles as it was the company’s biggest purchase last year for more than $500 million.
The company has also discontinued the recently introduced product in April, the Pixy Selfie Drone. Spiegel said the decision was made because Snapchat wanted to focus on different priorities, based on a report from The Wall Street Journal.
Also Read: Snap Halts Development of Pixy Selfie Drone-Why?
Following the layoffs is the sudden resignation of Snapchat’s chief commercial and advertising officer, Jeremi Gorman, and vice president of advertising sales, Americas division, Peter Naylor. The departures of these executives have been confirmed by the company’s spokesperson.
AdAge also confirmed that the two former employees will join Netflix to lead the new ad-supported plans. Netflix spokeswoman Kumiko Hidaka said Gorman will serve as president of global advertising while Naylor will lead the ad sales department.
COO Greg Peters, the person in charge of both, said their two experiences will be the solution to expanding the business when it comes to membership options, as they offer plans funded by advertising to its customers.
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Written by Inno Flores
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