Snap Inc is the latest in a string of tech companies trimming their workforce amid a downturn in advertising revenue. The social media giant is slashing approximately 10% of its global staff, a move that echoes similar actions taken by its industry peers since the start of the year.
The company anticipates that the reductions will result in pre-tax charges ranging from $55-75 million due to severance and associated expenses, along with future cash expenditures of $45-55 million, mainly slated for the first quarter of this year, as disclosed in a filing on Monday, January 5.
Snap attributes these cuts to the strategic realignment necessary for “best position our business (needs) to execute on our highest priorities.”
Like other players in the social media realm, Snap has been grappling with a slowdown in ad earnings, responding by streamlining operations and shelving non-priority projects.
Just months ago, it announced the closure of a unit dedicated to developing augmented reality services for businesses, marking the end of its latest effort to diversify beyond its ad-reliant model. This move was projected to eliminate 170 positions.
As of September, 2023, Snap boasted a workforce of around 5,400 employees. A reduction of 10% from that figure implies roughly 540 job losses.
The company anticipates that the layoffs may extend into the second quarter of 2024 as it navigates compliance with local regulations.
With inputs from Bloomberg
