Snap, the company behind Snapchat, is planning to lay off approximately 20% of its staff after a major decline in stock value.
The social media app has been planning these layoffs for several weeks, according to the Verge, after experiencing mediocre earnings results in the second quarter of 2022. The layoffs will begin on Wednesday and reflect the company’s shrinking market numbers among its competitors.
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The teams most impacted by the layoffs will include those involved in building mini-apps and games within Snapchat and the team running the social mapping app Zenly. Snap’s hardware section, which handles the company’s efforts to create the Snap Spectacles and the recently canceled Pixy camera drone, is also expected to see layoffs.
Snap experienced an 80% drop in value since the start of 2022, reflecting diminishing investments in digital advertising. The loss in profit is also caused, in part, by Apple’s introduction of the “Ask App Not to Track” prompt, which has diminished the ability of companies like Snap to sell targeted ads to companies.
Snap has also been dealing with legal troubles. The company agreed to pay $35 million as part of a settlement with the state of Illinois over allegations of a breach of privacy.
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Several other tech companies have engaged in layoffs amid stagnating stock prices. Facebook parent Meta decided to lay off several employees randomly using an algorithm. Apple, Tesla, and Netflix have also laid off several hundred employees in the last few months.
Snap did not respond to requests for comment.
