Snap to lay off employees after witnessing disappointing Q2 revenues
Category: #headline  By Akshay Kedari  Date: 2022-08-10
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Snap to lay off employees after witnessing disappointing Q2 revenues

Snap Inc. is reportedly in the early stages of planning for job cuts, which are being driven primarily by the company's recent underwhelming financial results. The cutbacks are planned because the instant messaging service failed to forecast revenue for the third quarter of the year.

This led to an enormous drop in share prices to an all-time low. While it is unknown how many of Snap's 6,000 employees will be laid off at this time, executives across the corporation are trying to ascertain the actual extent of job cuts for their respective teams.

The company has been struggling on two fronts recently. The first is Apple Inc.'s no-tracking request, which a large percentage of iPhone users have agreed to, making it more challenging for Snap to target their ads as effectively.

Second, Snap's share price has been hampered by the broader economic stagnation that has affected nearly all large businesses that have used financial reserves to stay afloat. However, these layoffs are not a first for the company; it took a similar path in 2018 when it was still dealing with the fallout from a botched Snapchat redesign.

It is worth mentioning that Snap has only had one quarterly profit since being listed on the stock exchange in 2017, even though its customer base has grown to 347 million daily visitors, exceeding Twitter Inc. Due to the company's inability to establish a profitable advertising business, CEO Evan Spiegel informed employees that they would drastically reduce recruitment to find additional cost savings.

Similarly, a slew of other tech firms, including Twitter Inc. and TikTok Inc., have declared layoffs in recent weeks. Even Snap's larger and more commercially viable social media rival, Meta Platforms Inc., has slowed the hiring process.

Source credit:

https://www.theverge.com/2022/8/8/23297637/snap-snapchat-layoff-plans-weak-q2-earnings

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Akshay Kedari    

Akshay Kedari

Akshay holds a Bachelor’s degree in computer engineering. Despite having a penchant for software development and the like, Akshay took to writing as a career owing to his passion for the field. Presently, Akshay writes articles for itresearchbrief.com and a few oth...

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