Snap to slash 10% of staff as tech layoffs continue

By Emily Bary

The company hasn't seen the same level of growth as peers

Snap Inc. plans to conduct a new round of layoffs as part of a restructuring.

Snapchat's parent company intends to cut about 10% of its staff "to best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time," it said in a Monday morning filing with the Securities and Exchange Commission.

Snap (SNAP) called its restructuring plans a "difficult decision"

The company had 5,288 employees as of Dec. 31, 2022, according to the company's last annual filing. Snap should disclose a new employee count shortly as it is due to report quarterly and full-year earnings Tuesday afternoon.

Snap laid off about 20% of employees in a sweeping round of cuts announced in August 2022. The company joins Okta Inc. and Wayfair Inc., both of which announced recent workforce reductions.

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The company returned to revenue growth in its last-reported quarter and is expected to show about 6% top-line growth when it posts fourth-quarter results Tuesday.

But while Snap is showing growth and has seen its shares gain 50% over the past 12 months, the company hasn't seen the same sort of business momentum as some of its peers. Facebook parent Meta Platforms Inc. (META), for instance, reported nearly 25% growth in revenue for its latest quarter - and from a substantially larger base. Google-parent Alphabet Inc.'s (GOOG) (GOOGL) revenue increased about 14%.

Unlike those companies, Snap is unprofitable on a GAAP basis.

Read: 'Anxiety-inducing' layoffs are scaring many U.S. workers. How worried should they be?

The company expects to incur $44 million to $75 million in pretax charges, largely related to severance and related costs. These are anticipated to hit mainly during the first quarter.

-Emily Bary

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02-05-24 1014ET

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