Snapchats Reportedly Looking to Cull Over 1,200 Jobs as Part of its Broader Cost-Cutting Efforts

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The horror run continues for Snap, with the company reportedly set to lay off around 20% of its workforce as it seeks to drastically cut costs amid worsening market conditions.

As reported by The Verge, Snaps planning to cull more than 1,200 full-time roles as part of a major restructure aimed at getting its business back on track.

As for The Verge:

The layoffs, which Snap has been planningfor the past several weeks, will begin on Wednesday and hit some departments harder than others. For example, the team working on ways for developers to build mini apps and gamesinside Snapchat will be severely impacted. Zenly, the social mapping appSnap bought in 2017 and has since run separately, will also see deep cuts.

Even more concerning for the companys longer-term prospects, Snap will also be looking to cut staff from its hardware division, which is currently focused on AR-enabled Spectacles. Snap also recently announced that it willcease production of its Pixy selfie drone, which it launched just four months ago as a new way to capture content.

AR in particular is a key focus for Snaps future development, with the platform continually leading the way on the latest AR innovations, despite competing against far bigger companies in Apple and Meta on the same.

If Snaps forced to take a back seat with its AR Spectacles, that could be a major blow for the companys plans, which could eventually see its competitors take over the space, and force Snap to the outer, limiting its growth potential.

But at the same time, Snap has to do something.

Shares in Snap are down 80% this year, due to various factors, including the war in Ukraine, which has impacted European ad spend, along with rising global interest rates, and Apples iOS privacy changes, which have impacted ad targeting capacity in the app .

That, in turn, has reduced ad effectiveness, and thus, advertiser interest, though Snap has been working to reassure ad partners that it is developing solutions. Itll just take time.

Incidentally, that advice came from Snap Chief Business Officer Jeremi Gorman during the companys Q1 earnings call in April this year, and Gorman is now among those that will be departing Snap amid this latest shift (Gorman and another former Snap exec, Peter Naylor, are both joining Netflix to oversee its development of a cheaper, ad-supported subscription model).

Snap had already announced that it would substantially reduce hiring as part of its broader cost-cutting efforts, while in May, it also issued a profit warningdue to a worseningmacroeconomic environment.

As such, the news of potential job cuts is no real surprise. But the scale here is significant.

How will cutting 20% ​​of its headcount impact development, and change the course of the app, potentially for years to come? We dont know how long the latest economic downturn will last, nor how long it might take for Snap to reimagine its ad targeting system, but right now, both seem like theyre a way off.

Then again, as The Verge also notes, Snap has increased its staffing numbers significantly over the last two years, and it may be that this is a rationalization that needs to happen – much like Metas looming job cuts, which CEO Mark Zuckerberg has stated are a designed to turn up the heat on poor performers.

With that in mind, it might not be the destabilizing shift that it, initially, seems.

Well soon find out, with Snap reportedly looking to get the process underway this week.

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