Snap is conducting more layoffs, adding to an already tough year for tech-industry jobs.
The Snapchat parent company let go of several dozen staffers on Friday, according to two people familiar with the company. These people spoke on the condition of anonymity so they could speak freely, and their identities are known to Business Insider.
They noted that there had been no companywide announcement about the layoffs. More cuts are expected to come down next week before Snap reports its fourth-quarter financial results on Tuesday, one of the people said.
A company spokesperson declined to comment.
Evan Spiegel, one of Snap’s cofounders and its CEO, attempted to rally employees with a year-opening memo last month highlighting a new sense of “urgency” at the company as it pushes on with its own augmented-reality glasses, now in the shadow of Apple and Meta’s own versions. Snap is struggling to become profitable and has yet to overcome advertising losses, while larger rivals such as Meta have seen their businesses boom.
“We need our business to be strong enough and profitable enough to deliver the future of computing in augmented reality,” Spiegel said in the January note, as Business Insider reported. The title of the memo was “Social media is dead. Long live Snapchat!”
Many Snap employees took the memo as a hint that more company changes were coming. Staffers have been “on pins and needles” about layoffs in recent weeks, according to one of the people familiar with the company.
Given Snap’s lackluster business performance in 2023, “it seemed inevitable” that it would do layoffs again, one of the people familiar with the company said. On Tuesday, employees noticed that people in the company’s human-resources department had their calendars blocked off for the whole day, something that they said had happened just before its mass layoff in 2022 when Snap let go of about 20% of its employees in one day.
Since then, the company has introduced a quarterly performance-review system and changed how it pays bonuses. It’s also put a more stringent return-to-office mandate in place, requiring in-office work four days a week. Along with smaller, incremental cuts to staff and an overhaul of leadership ranks, employee morale has been “extremely low,” the other person familiar with the company said.
In September, Snap let go of about 150 people after shutting down a short-lived division for creating augmented-reality tools for businesses.
In October, Spiegel announced the exit of Jerry Hunter, who was promoted to Snap’s first COO in 2022, along with its lackluster third-quarter results. The company is not replacing Hunter, and oversight of Snap’s business leaders is now up to Spiegel, who has long maintained close oversight of product.
In November, Snap’s longtime engineering leader, Nima Khajehnouri, left, as BI reported. That coincided with the company laying off about 20 product managers, the Information reported.
Expectations for Snap’s quarterly results are somewhat muted. Though Wall Street expects revenue growth, engagement trends “appear to be quite weak,” Bernstein said. Mark Mahaney, the senior managing director at Evercore, said in mid-January that “Snap has yet to snap back.”
This year has already seen larger companies with better business performance such as Google, Amazon, and Meta conducting further layoffs or reorganizations. Several other companies, including Block and PayPal, have let go of thousands of workers as well.
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