Snap is in the early stages of planning layoffs, according to two people familiar with the plans.
The planned cuts come after the company recently delivered disappointing earnings results and didn't forecast earnings for the third quarter — news that sent its stock price cratering to near-all-time lows. It’s currently unclear how many of Snap’s more than 6,000 employees will be laid off, as managers across the company are still planning the full scope of the cuts for their teams.
Russ Caditz-Peck, a Snap spokesman, declined to comment.
Snap’s business has been hurt recently on two major fronts: The first is Apple’s introduction of the “Ask App Not to Track” prompt, which an estimated majority of iPhone owners have opted “Yes” to, making it harder for companies like Snap to as effectively target their ads. The second factor is the broader economic downturn that has especially punished the stock prices of Snap and other cash-burning companies. Snap has been profitable in only one quarter since it went public in 2017.
The last time Snap did layoffs was in 2018, when it was still reeling from the fallout of a poorly executed Snapchat redesign. Since then, its user base has grown to 347 million daily users, surpassing Twitter.
But the company has struggled to build a significant ads business. And its attempts at selling hardware, like a $230 selfie drone, haven’t gone anywhere. In late May, CEO Evan Spiegel told employees that the company would sharply pullback on hiring and “find additional cost savings.”
Snap’s isn’t alone in needing to make cuts: Twitter, TikTok, and a host of other tech firms have either announced layoffs or paused hiring in recent months. Even Snap’s much larger and profitable competitor in social media, Meta, has slowed hiring and warned employees about tough times ahead.