Snapchat maker Snap is the latest tech company to conduct layoffs with plans for a 10% workforce reduction, the company announced on Monday. The layoffs would impact 500-plus employees, according to headcount figures Snap released in November 2023, when it saw small-scale layoffs of its then north of 5,000 employees.
The layoffs were announced in an SEC filing, where Snap explained the move was necessary to support its further growth.
“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,” the filing stated. “As a result, we currently estimate that we will incur pre-tax charges in the range of $55 million to $75 million, primarily consisting of severance and related costs, and other charges, of which $45 million to $55 million are expected to be future cash expenditures.”
Snap added the majority of those costs would be incurred in the first quarter of 2024, though local law and other factors may see some costs extending into Q2. The company is due to report its earnings after the market’s close on Monday, Feb. 5.
“We are reorganizing our team to reduce hierarchy and promote in-person collaboration,” noted a Snap spokesperson in a statement provided to TechCrunch. “We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap,” they added.
This second wave of layoffs in a matter of months follows a smaller headcount reduction late last year when Snap reorganized its product team, again with a focus on reducing layers and increasing decision-making speed, the company said at the time. Snap’s VP of Engineering, Nima Khajehnouri, also departed at that time, alongside less than 20 others in the product division. Snap last September had also shuttered its enterprise services division after less than a year.
In 2022, Snap also cut 20% of staff amid a larger restructuring.
Snap’s stock price initially jumped after reporting its Q3 earnings in October, after beating analysts’ estimates of both revenue and earnings per share, at $1.19 billion and 2 cents, ahead of estimates of $1.11 billion and a 4-cent loss. The comapny came in higher on user growth, as well, reporting 406 million global daily active users, above the 405.7 million expected. However, the company’s net loss had widened by 2% year-over-year to $368 million in the quarter.
As of Q3, Snap had 5,367 employees.
