Snap reportedly intends to lay off about 1 in 5 employees

By Jeremy C. Owens

Week-long ongoing job cuts will begin Wednesday and will target specific departments, according to The Verge

Snap Inc. plans to lay off around 20% of its staff as the online advertising industry faces a downturn, according to a report on Tuesday.

The Verge reported that there was less than half an hour left in Tuesday’s trading session that Snap (SNAP) would cut about one in five employees, after previously reporting management discussions of cuts following a disappointing quarterly results report. The new report says executives will begin making cuts on Wednesday and target specific departments such as hardware, an area Snapchat’s parent company is struggling to break into, including a freshly scrapped drone initiative.

A Snap spokesperson declined to comment.

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At the end of 2021, Snap had 5,661 full-time employees, down from 3,863 employees a year earlier, according to the company’s annual filings with the Securities and Exchange Commission. The Verge reported that Snap’s total number of employees exceeded 6,400.

Snap’s biggest online advertising rivals, such as Facebook parent company Meta Platforms Inc. (META) and Google parent Alphabet Inc. (GOOGL) (GOOGL), have confirmed a widespread drop in advertising online amid macroeconomic declines in recent months.

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Snap shares were down around 1% on Tuesday before the news was released, but fell nearly 3% in the closing minutes of the session before closing 2.4% lower at 10.02. $. Shares fell another 6% in after-hours trading. The stock has fallen nearly 79% so far this year, with the S&P 500 index falling 15.4%.

-Jeremy C. Owens

 

(END) Dow Jones Newswire

08-31-22 0750ET

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