As Snapchat continues to bleed money and finds itself wedged somewhere between Instagram and TikTok, the platform’s parent company Snap is reportedly taking some aggressive cost-saving measures. As The Verge reported first, Snap is planning to lay off 20 percent of its roughly 6,400 full-time employees, with the departments working on hardware and mini apps and games said to be most severely affected by the imminent job cuts.
Having hired aggressively during the pandemic, Snap’s business didn’t grow as quickly as hoped in recent quarters, as global economic headwinds, intense competition and Apple’s new App Tracking Transparency feature have made it harder to sell online advertising. Snap’s share price is down nearly 80 percent this year, signaling investors’ low confidence in the company’s ability to turn things around.
Interestingly, Snap’s share price was up 15 percent in early trading after the news of the layoffs broke, indicating that shareholders appreciate the company’s cost-cutting efforts.