Snapchat's Parent Company's Stock Price Falls Amid Reports Of Over 1,000 Employee Layoffs

Snapchat¡¯s developer company Snap Inc. is reportedly planning to lay off around 20% of its nearly 6,500 employees following weeks of planning. Over 1,000 employees may be laid off in the process.

Job cuts will begin today with the team working on Minis, small applications made by third-parties which run in the Snapchat app, affected the most, the report said. Zenly, the company Snap acquired in 2017 for social mapping, will also be affected by the workforce reduction, as per a report by The Verge, an American technology news website.

It mentioned that Snap has had a difficult year, with the company most recently missing on both revenue and earnings in the second quarter. In its Q2 investor letter last month on July 21st 2022, Snap had said that it would not provide guidance for its current quarter and said ¡°forward-looking visibility remains incredibly challenging.¡±

As per Bloomberg report, Snap shares fell over 2.5% to $10.01 at the close in New York yesterday. The stock has plummeted nearly 79% this year as the company has faced a slowdown. Earlier on the day it reported its second quarter earnings in July 2022, Snap shares had dropped more than 25%. Snap had posted a $422 million Q2 loss. The company¡¯s disappointing results kickstarted a wave of social media companies reporting poor results, citing a weak online advertising market, among other reasons, as per the report.

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Earlier in August, Snap had scrapped the development of its Pixy flying camera drone, which was first announced in April 2022.

Snap is not the only tech company to miss its targets. Facebook-parent Meta too had missed analysts¡¯ estimates for its second quarter, as did Image sharing service Pinterest, the report mentioned.

Social media companies blamed some of their problems on businesses cutting back on digital advertising because of the weak economy. Additionally, these companies have said that a 2021 privacy update to Apple¡¯s iOS has made it more difficult for them to track users, thus negatively impacting their online ad units.

Also Read: List Of Companies That Have Laid Off Employees In 2022

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