Snapchat to lay off 20% of their employees after revenue declines
The social media company also lost two senior executives to Netflix
FOX Business host Charles Payne provides insight on the Snapchat stock and provides insight for investors on 'Making Money.'
Snapchat announced Wednesday morning it would lay off 20% of its employees after revenue declines.
"Our forward-looking revenue visibility remains limited, and our current year-over-year QTD revenue growth of 8% is well below what we were expecting earlier this year, said Evan Spiegel, the company CEO, in a statement. "While we will continue our work to reaccelerate revenue growth, we must ensure Snap’s long term success in any environment."
"As a result, we have made the difficult decision to reduce the size of our team by approximately 20%. The scale of these changes vary from team to team, depending upon the level of prioritization and investment needed to execute against our strategic priorities," Spiegel added. "The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long term future and reaccelerate our revenue growth. Overall, the size of our team will remain larger than it was at this time last year."
The company claims it will provide at least four months of compensation to former employees in the United States. The layoffs are expected to hit certain teams more significantly than others, such as the developers of their mini-games and Snap's hardware division, the Verge first reported on Tuesday.
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Snapchat CEO Evan Spiegel announced Wednesday that the company would layoff 20% of its workforce. (REUTERS/Thomas White/File Photo / Reuters)
Since the start of the pandemic, Snap has nearly doubled the size of its full-time employees. In March 2020, the company employed approximately 3,400 people but ended last quarter with over 6,400 workers. The company also purchased WaveOptics, an AR display distributor, in May 2021 for over $500 million.
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"We are also reorganizing our team to better meet the challenges of the current macroeconomic environment and to make as much progress as possible, as quickly as possible, in the areas of our business that we are able to control," Spiegel noted. "we are promoting Jerry Hunter to Chief Operating Officer, effective today. Jerry will lead our monetization efforts across our three operating regions (EMEA, APAC, and Americas), as well as our Growth, Partnerships & Content, AR Enterprise, and SMB teams."
Snap recently lost two senior executives to Netflix, its chief business officer Jeremi Gorman and VP of sales Peter Naylor, according to the Hollywood Reporter.