Snapchat’s parent company Snap is reportedly in the early stages of planning layoffs, according to two sources.
The Verge reports that according to two sources familiar with the situation, Snap is in the early stages of planning layoffs at the social media company. The planned cuts are coming shortly after the company delivered disappointing earnings results and failed to forecast earnings for the third quarter.
Snap stock prices cratered following the earnings report. It is unclear how many of Snap’s more than 6,000 employees will be affected by the layoffs as managers across the firm attempt to plan which teams to cut.
Snap’s business has been affected negatively in two major areas in recent years. Apple’s “Ask App Not to Track” prompt in iOS 14 had a hugely negative effect on Snap’s ability to effectively target ads to users.
Breitbart News reported on Apple’s impact on Snapchat in October 2021, writing:
Snap CEO Evan Spiegel said: “Our advertising business was disrupted by changes to iOS ad tracking that were broadly rolled out by Apple in June and July. While we anticipated some degree of business disruption, the new Apple provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS.”
A broader economic downturn also had a major effect on Snap’s stock prices and other cash-burning companies. Snap has only reported being profitable in one quarter since the company went public in 2017.
Snap last laid off employees in 2018 when it was still being affected by the rollout of the company’s poorly executed redesign of Snapchat. Since then, the app’s user base has grown to 347 million daily users, surpassing other social media platforms like Twitter.
The company has struggled to build a profitable ad business and its attempts at selling hardware, such as Snap Spectacle and a $230 selfie drone, have not been profitable. In late May, Snap CEO Evan Spiegel told employees that the company would be sharply pulling back on hiring and “find additional cost savings.”
Snap isn’t the only tech firm making layoffs with companies such as Twitter, TikTok, and many others announcing employee cuts and paused hiring in recent months. Even Facebook has slowed hiring and warned employees of tough times ahead.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan