Technology
Monday, February 5th, 2024 3:25 pm EDT
Key Points
- Snap Layoffs:
- Social media company Snap has announced a workforce reduction of 10%, amounting to approximately 500 employees, with the goal of promoting in-person collaboration within the company.
- Financial Impact and Previous Layoffs:
- The company anticipates charges ranging from $55 million to $75 million as a result of the layoffs. Snap has undergone multiple rounds of layoffs since 2022, with the most recent occurring in November, focusing on trimming a small number of product employees. The last major round of cuts was in August 2022, when 20% of the staff was laid off, accompanied by a restructuring of business lines.
- Tech Industry Layoffs and Investor Response:
- Snap is the latest tech company to implement layoffs in 2024, joining others in the industry. In January alone, nearly 24,000 tech workers lost their jobs. Cybersecurity and identity company Okta and video communication platform Zoom have also initiated staff reductions this month. Despite challenges, investors generally support tech companies’ efforts to streamline and improve efficiency. Meta, for example, implemented a “year of efficiency” that resulted in significant workforce cuts, leading to the company’s stock reaching an all-time high. Other major tech players like Amazon and Alphabet have also pursued similar headcount reductions.
- CEO Testimony and Revenue Trends:
- Snap CEO Evan Spiegel recently testified before the Senate Judiciary Committee, addressing concerns about the impact of social media platforms on young people. The company’s revenue, heavily dependent on digital advertising spend, experienced fluctuations in some quarters but managed to break a streak of revenue declines in its most recent quarter. Snap has also initiated a $500 million share buyback program. Despite these initiatives, Snap’s stock remains below its debut price and significantly lower than its 2021 high of around $83.
Social media company Snap has announced plans to lay off approximately 10% of its global workforce, equivalent to around 500 employees, with the aim of promoting in-person collaboration. This move is part of Snap’s ongoing efforts to streamline its operations and reduce hierarchy within the company. The Snapchat-maker’s shares experienced a slight decline of around 1% in morning trading following the announcement. The company anticipates charges ranging from $55 million to $75 million as a result of the layoffs. Snap has undergone multiple rounds of layoffs since 2022, with the last major round occurring in August 2022 when 20% of the staff was laid off, accompanied by a business line restructuring. The current layoffs come in the wake of similar workforce reductions in the tech industry, with nearly 24,000 tech workers losing their jobs in January alone. Other companies, such as cybersecurity firm Okta and video communication platform Zoom, have also recently implemented layoffs. Snap CEO Evan Spiegel testified before the Senate Judiciary Committee last week, addressing concerns about the impact of social media platforms on young people. Despite challenges, investors generally support tech companies’ efforts to streamline and improve efficiency. Meta, for instance, implemented a “year of efficiency” with significant workforce cuts, resulting in the company’s stock reaching an all-time high. Snap, like its counterparts Google and Facebook, relies heavily on digital advertising revenue. While the company has faced fluctuations in revenue, it managed to break a streak of declines in its most recent quarter. Additionally, Snap initiated a $500 million share buyback program. However, Snap’s stock currently remains below its debut price and significantly lower than its 2021 high of around $83.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/05/snap-to-lay-off-10percent-of-global-workforce-around-500-employees.html
