Snap has started laying off one-fifth of its 6,400-strong workforce, as the social media giant’s horror year continues.
The layoffs began yesterday, with its hardware division, apps and games development team, and those working on Zenly, the social mapping app that company acquired in 2017, being hit the hardest.
Amidst the chaos, Jeremi Gorman, Snap’s chief business officer, has jumped ship to Netflix, where he will run its parlay into the ad-supported streaming world.
Snap hired aggressively during the pandemic, growing from a 3,427-strong workforce in March 2020, to 6,446 staffers at the end of June 2022. It also made its largest acquisition, the US$500 million takeover of WaveOptics, the supplier of the augmented reality displays that power its new Spectacles glasses.
The problem is that the company doesn’t turn a profit.
Shares have risen 8.7 per cent overnight, due to this aggressive staff cull, but are down over 85 per cent in the past twelve months.
For the June quarter, Snap suffered losses of A$620 million, and said its not providing guidance for the third quarter because “forward-looking visibility remains incredibly challenging.”
“We are not satisfied with the results we are delivering, regardless of the current headwinds,” the company said.
Snap has managed to turn a profit just once since going public in 2017.
