Snap, the parent company of the social media application Snapchat, announced on Monday that it would reduce its global workforce by approximately 528 employees, constituting 10 per cent of its total workforce, in an effort to “promote in-person collaboration.” This indicates that the trend of tech layoffs observed in 2023 may continue as tech companies navigate economic uncertainty thrown at them.
The company, known for its photo messaging app Snapchat, has faced challenges in converting its popularity among young users into sustained revenue growth and competing with larger rivals such as Meta, which announced its first dividend on Thursday. Snap will be announcing its fourth quarter result on Tuesday.
The company has undergone several rounds of layoffs since 2022, with the most recent occurring in November, during which it reduced a small number of product employees. The company's most significant round of layoffs occurred in August 2022, during which it reduced its staff by 20 per cent and reorganised its business lines.
“We are reorganising our team to reduce hierarchy and promote in-person collaboration. We are focused on supporting our departing team members,” CNBC quoted a Snap spokesperson as saying.
"In order to best position our business to execute on our highest priorities and to ensure we have the capacity to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team," Snap said.
Snap shares fell 4 per cent to $16.38 on Monday.
Last week, Snap CEO Evan Spiegel appeared before the Senate Judiciary Committee, joining several other social media executives under scrutiny for their platforms' adverse impact on young people.
Snap is the most recent tech firm to continue downsising in 2024. In January alone, nearly 24,000 tech workers lost their jobs. Already this month, cybersecurity and identity firm Okta, as well as Zoom, have implemented staff layoffs.