Snap Inc. plans to lay off around 20% of its staff as the online advertising industry faces a downturn, according to a report on Tuesday.
The Verge reported that with less than half an hour left in Tuesday’s trading session Snap SNAP,
would cut about one in five employees, after previously reporting management discussions of cuts following a disappointing quarterly earnings report. The new report says executives will begin making cuts on Wednesday and target specific departments such as hardware, an area Snapchat’s parent company is struggling to break into, including a freshly scrapped drone initiative.
A Snap spokesperson declined to comment.
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At the end of 2021, Snap had 5,661 full-time employees, down from 3,863 employees a year earlier, according to the company’s annual filings with the Securities and Exchange Commission. The Verge reported that Snap’s total number of employees exceeded 6,400.
Snap’s biggest online advertising rivals, such as Facebook parent company Meta Platforms Inc. META,
and Google’s parent company Alphabet Inc. GOOGL,
confirmed a general drop in online advertising amid the macroeconomic declines of recent months.
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Snap shares were down around 1% on Tuesday before the news was released, but fell nearly 3% in the closing minutes of the session before closing 2.4% lower at 10.02. $. The stock is down nearly 79% so far this year, as the S&P 500 SPX Index,