Snap to cut 500 jobs a tech layoffs continue
Snap said on Monday it would cut around 528 employees, or 10 percent of its global workforce, a sign that the spate of tech layoffs seen in 2023 could persist as firms grapple with economic uncertainty. The company, which owns photo messaging app Snapchat, has long struggled to turn its popularity with young users into consistent revenue growth and compete with larger rivals like Facebook-owner Meta Platforms, which issued its first dividend on Thursday after laying off staff last year. Snap will report fourth quarter results on Tuesday. "The layoffs don’t bode well for the state of Snap’s business," said Jasmine Enberg, principal analyst at research firm Insider Intelligence. "Snap is likely trying to garner some goodwill with investors, who rewarded its competitor for its cost-cutting measures." Shares of Snap fell 4 percent to US$16.38. "In order to best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team," Snap said. The company expects pre-tax charges in the range of US$55 million to US$75 million, primarily consisting of severance and related costs, and other charges, of which US$45 million to US$55 million are expected to be future cash expenditures. The majority of these costs are expected to be incurred during the first quarter of 2024. Snap joins other tech and media firms such as Amazon and Alphabet that announced layoffs in January. Overall, almost 32,000 workers have been let go from 122 tech companies since the start of the year, according to tracking website Layoffs.fyi.