The CEO of Snap Inc., the parent company of the popular app Snapchat, Evan Spiegel, has announced the company’s plan to lay off about 1,200 staff members of its more than 6,400 global employees. The announcement was made available to the public in a statement last Wednesday saying the company is restructuring to focus on “three strategic priorities: community growth, revenue growth, and augmented reality.”
The news will impact the jobs of more than 1,200 personnel at the tech giant, and comes as broader economic conditions have deteriorated in recent months amid rising inflation and the Federal Reserve’s interest rates increase. The recent market downturn has especially affected the tech sector, where news of hiring freezes, layoffs, and other cost-cutting measures have dominated headlines for months. “As a result, we are sunsetting several projects, reducing the size of our team by approximately 20 percent, and announcing the promotion of Jerry Hunter to Chief Operating Officer,” Spiegel’s statement added.
The chief executive continued: “Changes of this magnitude are always difficult, and we are focused on supporting our departing team members through this transition. We are deeply grateful for their many contributions to Snap.”
According to a US Securities and Exchange Commission filing by the company, Snap reported it had 6,446 full-time employees as of the second quarter of 2022.
Snap stock has plummeted by more than 75% since the start of the year. Shares of Snap took a major tumble last month after the company reported dismal sales growth and warned investors that the economy had worsened at a faster pace than expected.
In a separate memo from Spiegel to staff members which was shared publicly online, the chief executive said leaders will notify those impacted by the change as soon as possible.
“In the United States, we will provide at least four months of compensation replacement, as well as financial assistance to enrol in COBRA (Consolidated Omnibus Budget Reconciliation Act), so that team members will have until the end of the year to find new opportunities while still receiving compensation and health benefits from Snap,” he wrote.
He added that the “extent of this reduction” should “substantially reduce the risk of ever having to do this again.”