Snap will cut some projects and lay off 20% of its workforce

Snap, the company that owns Snapchat, confirmed in a memo sent out on Wednesday that it will be laying off about 20% of its workforce.

The camera-equipped Pixy drone, Snap Originals, Zenly, and Snapchat’s games are just some of the projects that have been cancelled along with a number of employees. Spiegel stated that the company is reorganising because of slow revenue growth, which has averaged around 8% annually and is expected to remain low into next year. Increasing “community growth,” “revenue growth,” and “augmented reality,” he said, will be Snap’s top priorities. However, the company is still actively developing and investing in its augmented reality Spectacles hardware.

Spiegel acknowledged that cutting some of Snap’s 6,000 employees was a challenging decision. As part of the company’s reorganization, Jerry Hunter was named chief operating officer (COO), giving him responsibility for the company’s products, sales, expansion, and content. Additionally, several executive leadership positions at Snap are currently open as the company implements its new organisational structure.

The company’s second-quarter earnings were disappointing, and reported that the company planned to reduce staff as a result.

Companies in the social media industry, such as Snap, have found it challenging to monetize their platforms due to a decline in digital ad revenue. Snap’s profits have taken a hit due to a number of factors, including intensifying competition from apps like TikTok, updates to Apple’s iOS, and a tough economic climate. Spiegel has stated that the company is working to increase revenue and decrease the likelihood of layoffs in the near future.