Snapchat's parent company, Snap, cutting 10 per cent of its workforce: Here's why

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Snapchat's parent company, Snap, revealed plans to let go of about 10 per cent of its global full-time workforce. The move comes after previous staff reductions, including a 20 per cent cut in 2022 and a 3 per cent reduction last year. At the beginning of 2023, Snap had approximately 5,300 employees.

Financial impact and timing

According to IANS, Snap anticipates incurring pre-tax charges between $55 million and $75 million, covering severance, related costs, and other expenses. Of this, $45 million to $55 million is expected to be future cash expenditures.

The majority of these expenses will be faced in the first quarter of 2024. The process of potential position eliminations in each country is subject to local laws and consultation requirements, possibly extending into the second quarter of 2024 or beyond in certain countries.

“Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process into the second quarter of 2024 or beyond in certain countries,” said Snap.

Reasons behind the layoffs

Snap clarified that the job cuts aim to position the business for optimal execution of key priorities strategically. The move is also intended to ensure the capacity for incremental investments supporting future growth. This decision follows a smaller headcount reduction late last year, coinciding with Snap's reorganisation of its product team.