Snap is in the early stages of planning layoffs, according to two people familiar with the plans.
The planned cuts come after the company recently reported disappointing earnings and no earnings guidance for the third quarter — news that sent its share price to near all-time lows. It’s currently unclear how many of Snap’s more than 6,000 employees will be laid off, as managers across the company are still planning the full extent of the cuts for their teams.
Russ Caditz-Peck, a spokesman for Snap, declined to comment.
Snap’s business has been hurt on two major fronts lately: The first is Apple’s introduction of the “Ask App Not to Track” prompt, which an estimated majority of iPhone owners have voted “yes” to, which it is for business how Snap is making it harder to target their ads effectively. The second factor is the broader economic downturn, which has hit Snap’s stock prices and other cash-burning companies particularly hard. Snap has only been profitable in one quarter since going public in 2017.
The last time Snap made layoffs was in 2018, when it was still suffering from the effects of a poorly executed Snapchat redesign. Since then, its user base has grown to 347 million daily users, surpassing Twitter.
But the company has struggled to build a meaningful advertising business. And his attempts to sell hardware, like a $230 selfie drone, have gone nowhere. In late May, CEO Evan Spiegel told employees that the company would be heavily scaling back hiring and “finding additional cost savings.”
Snap isn’t the only one facing cuts: Twitter, TikTok, and a host of other tech companies have either announced layoffs or suspended hiring in recent months. Even Snap’s much larger and more profitable social media competitor, Meta, has slowed hiring and warned employees of hard times ahead.