Snapchat parent Snap has joined several other major tech companies in announcing significant layoffs at the start of the year. Snap revealed Monday (Feb. 5) that it’s cutting 10% of its global workforce.
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The social media company said in a Securities and Exchange Commission filing that the cuts will “ best position our business to execute on our highest priorities” and ensure it can invest in its growth.
In the same filing, Snap said it expects to incur charges of $55 million to $75 million as a result of the layoffs. Most of those charges, which mainly consist of severance packages, are expected in the first quarter of 2024. Nearly 540 of the company’s reported 5,400 employees will be impacted.
Some 24,000 tech workers have been laid off in 2024
This news follows similar announcements at dozens of tech companies in just the first few weeks of the year. Since the start of 2024, at least 24,000 tech employees have been laid off, including at Amazon, Google and Microsoft.
These layoffs, a continuation of cuts from last year, have helped companies’ profits surge. Snap no doubt hopes to see the same results. In its third quarter earnings for 2023, it reported a net loss of $368 million (pdf).
Many tech players have shifted their labor savings from job cuts into more investments in AI. Snap could likely do the same. In 2023, the company launched two generative AI features: a chatbot called My AI and selfie generator Dreams.
Snap previously laid off about 1,300 workers in 2022. It then did another smaller round of layoffs last November, affecting fewer than 20 employees, TechCrunch reported.
Snap’s stock slid slid 3% during intraday trading. The company is set to announced its fourth-quarter earnings tomorrow (Feb. 6) after the bell.
