Snap is laying off 20% of its workforce, which equates to over 1,000 employees, according to a report published Tuesday by the Verge.
The layoffs will begin on Wednesday, the report said, and will affect certain departments including hardware and developer products.
Snap has had a difficult year, with the company most recently missing on both revenue and earnings in the second quarter. In its Q2 investor letter on July 21, Snap said it would not provide guidance for its current quarter and said “forward-looking visibility remains incredibly challenging.”
Snap shares dropped more than 25% on the day it reported its second quarter earnings. The company’s disappointing results kickstarted a wave of social media companies reporting poor results, citing a weak online advertising market, among other reasons.
Facebook-parent Meta also missed analysts’ estimates for its second quarter, as did Pinterest.
The social media companies blamed some of their problems on businesses cutting back on digital advertising because of the weak economy. Additionally, these companies have said that a 2021 privacy update to Apple’s iOS has made it more difficult for them to track users, thus negatively impacting their online ad units.
Earlier in August, Snap scrapped the development of its Pixy flying camera drone, first announced in April.
Snap declined to comment on the report.Source: CNBC