Snap, the Santa Monica company behind Snapchat and the recently recalled “Pixy Flying Camera,” announced a plan to lay off hundreds of workers on Monday. Snap joins a flood of California tech companies slashing their workforces this year.
The social media giant will give pink slips to around 10% of its full-time workers, according to a filing with the Securities and Exchange Commission. Based on the 5,367-person full-time headcount the company reported as of September, the layoff will hit more than 500 staffers.
Asked by SFGATE about the reasoning behind the layoffs, Snap spokesperson Russ Caditz-Peck said in an email, “We are reorganizing our team to reduce hierarchy and promote in-person collaboration.” Tech companies ranging in size and age have cited desires to cut back “hierarchy” when laying off workers over the past two years, often blaming pandemic-era over-hiring.
“We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap,” the spokesperson added.
Caditz-Peck didn’t answer questions about the geographic distribution of the layoffs or the company’s severance plans, but Snap’s SEC filing said the company will likely spend between $55 and $75 million handling the layoffs.
Even as Snap’s user base grows — 406 million people opened the app each day, as of the September filing — the company is shrinking. These new cuts come less than five months after Snap’s last layoff round; about 170 workers lost their jobs when the company shuttered a department that made augmented reality tools for business customers. And back in August 2022, Snap laid off 20% of its staff.
The company pulls in more than a billion dollars a quarter in revenue but still operates at a loss: From July through September, the company shed $368 million, per the filing for the period. Snap’s stock has dropped four-fifths in value from its pandemic high. The company reports earnings on Tuesday.
