Snap, the parent company of the messaging app Snapchat, announced a workforce reduction of more than 500 employees, amounting to 10 percent of its global work force. The majority of the layoffs are expected to occur in the first quarter of 2024. The company stated that it would incur pretax charges of $55 million to $75 million for severance and related costs due to the restructuring. Tech giants like Amazon, Google, and Microsoft have also implemented similar cost-cutting measures this year, following significant layoffs in the sector last year.
According to Business Insider, Snap laid off a small number of employees on Friday. The company is scheduled to report its earnings on Tuesday, and cost-cutting measures at other companies have affected stock prices. Snap shares were trading about 2 percent lower before the market opened on Monday.
Snapchat, which has over 400 million daily active users, experienced a decline in revenue in the first two quarters of last year and only 5 percent growth in its most recent quarter. In 2022, Snap cut 20 percent of its work force, discontinued at least six products, and made other significant changes to its operations.