According to two people familiar with the plans, Snap is in the early stages of planning layoffs.
The planned cuts come after the company recently posted disappointing earnings results and forecast no third-quarter profit – news that sent the stock price to an all-time low. It’s currently unclear how many of Snap’s more than 6,000 employees will be laid off as executives across the company are still planning the full scope of the cuts for their teams.
Russ Caditz-Peck, a Snap spokesperson, declined to comment.
Snap’s business has been hurt on two major fronts recently: The first is Apple’s introduction of the “Ask App Not to Track” prompt, which an estimated majority of iPhone owners have voted “Yes” for, making it more difficult for companies like Snap to as target their ads effectively. The second factor is the broader economic downturn that has mainly penalized the stock prices of Snap and other money-hungry companies. Snap has been profitable in just one quarter since it went public in 2017.
The last time Snap fired layoffs was in 2018, when it was still reeling from the fallout from a poorly executed Snapchat redesign. Since then, the user base has grown to 347 million daily users, more than Twitter.
But the company has struggled to build a significant advertising business. And his efforts to sell hardware like a $230 selfie drone have gone nowhere. At the end of May, CEO Evan Spiegel told employees that the company would sharply cut staff and “find additional cost savings”.
Snap’s isn’t alone in cutting back: Twitter, TikTok, and a host of other tech companies have announced layoffs or paused hiring in recent months. Even Snap’s much bigger and profitable social media competitor, Meta, has slowed down hiring and warned employees of tough times ahead.