Snap Inc., the parent company of the popular Snapchat app, announced plans to lay off about 20% of its more than 6,400 global employees.
The news will affect the jobs of more than 1,200 employees at the tech giant and comes at a time when broader economic conditions have deteriorated in recent months amid rising inflation and interest rate hikes by the Federal Reserve.
The recent market downturn has hit the tech sector especially hard, where news of a hiring freeze, layoffs and other cost-cutting measures dominated headlines for months.
Snap CEO Evan Spiegel announced the news in a statement Wednesday, which was shared with CNN Business saying the company is restructuring to focus on “three strategic priorities: community growth, revenue growth and augmented reality.”
“As a result, we are closing several projects, reducing our team size by approximately 20%, and announcing the promotion of Jerry Hunter to COO,” added Spiegel’s statement.
The chief executive continued, “Changes of this magnitude are always difficult, and we are focused on supporting our team members who are leaving during this transition. We are deeply grateful for his many contributions to Snap.”
Snap said it had 6,446 full-time employees in the second quarter of 2022, according to a US Securities and Exchange Commission filing.
Snap shares are down more than 75% since the start of the year.
Snap shares tumbled last month after the company reported dismal sales growth and warned investors that the economy has worsened at a faster pace than expected.
In a separate memo to Spiegel employees, shared publicly online, the chief executive said leaders will notify those affected as soon as possible.
“In the United States, we will provide at least four months of pay replacement, plus financial assistance to enroll in COBRA, so team members have until the end of the year to find new opportunities while still receiving pay and health benefits. from Snap,” he wrote.
He added that the “extent of this reduction” should “substantially reduce the risk of having to do it again.”
Source: CNN Brasil
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