Sun, July 21, 2024

Snap Cutting a Fifth of Its Employees

Snap

Snapchat is one of the few social networks that has managed to maintain relevancy for many years. Despite others like Instagram copying key features, it has managed to stay interesting and useful enough to keep a healthy base of users. However, it seems like the company is struggling a bit, as layoffs are inbound.

As the online advertising industry weakens, it seems Snap’s business model is less sustainable than before. With less than 30 minutes left in Tuesday’s trading session, the Verge made the cutoff public. Snap would be losing about a fifth of its employees in a considerable downsizing.

The primary factor behind the decision is a disappointing quarterly report for the company. The layoff was not entirely unannounced, as it was discussed as soon as quarterly results came in.

As such, Snap holders may have been prepared for such a drastic announcement. The stock value of the company has seen a decline, but not as massive as some would expect. At the time of writing, Snap is 2.53% down in the past 24 hours.

Before the downsizing, Snap has seen a significant growth in employee numbers during the past two years. At the start of 2021, the company numbered 3,863 workers. That number grew to 5,661 at the start of 2022 and kept growing rapidly. At the time of the decision, the total number of employees is over 6,400.

We may be seeing the demise of Snapchat unfold, as company results have been quite poor for a while. It’s lost nearly 80% of its stock value since the start of the year, underperforming significantly compared to its primary competitors. That pairs with an overall decline in the online advertisement industry and results in a deadly concoction for Snap. We’ll see whether it manages to stay afloat on its own.

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