Snap, the social media firm that owns Snapchat, is set to reduce its global workforce by 10%, meaning that around 500 employees will be laid off. The company is looking to encourage collaboration amongst its employees and this is part of its efforts to achieve this goal.
In September 2023, Snap had laid off around 150 jobs in its augmented reality (AR) division. The previous year in August 2022, Snapchat had let go of 20% of its workforce when Snap reported almost $10 billion in losses and its shares dipped following poor quarterly performance in July 2022.
The company has promised to support affected employees and has indicated that it will spend between $55 million to $75 million in this round of layoffs.
Snap is reportedly aiming to reorganize its workforce and eliminate hierarchies wherever possible to increase collaboration amongst its employees in person. The social media platform mainly relies on digital advertising for revenue.
As a positive corrective measure, the company has launched a $500 million share buyback scheme.
Last week, Evan Spiegel, the CEO of Snap, appeared before the Senate Judiciary Committee to testify about the negative impact of the platform on young minds.