New Delhi, Aug 31 (SocialNews.XYZ) Snap CEO Evan Spiegel on Tuesday confirmed that the company is laying off 20 per cent of its workforce, roughly 1,280 employees from 6,400-strong headcount, as the company "must face the consequences of lower revenue growth and adapt to the market environment".
In a letter to employees, he said that the scale of these lay offs vary from team to team, depending upon the level of prioritisation and investment needed to execute against the company's strategic priorities.
"The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long term future and reaccelerate our revenue growth. Overall, the size of our team will remain larger than it was at this time last year," Spiegel said.
Snap's stock has tanked nearly 80 per cent since the beginning of this year.
The job cuts at Snap were coming after the company posted disastrous quarterly results (Q2) amid poor future forecast. Snap suffered nearly $10 billion loss and its shares hit a new 52-week low.
Spiegel said that Snap is restructuring the business to increase focus on three strategic priorities: community growth, revenue growth, and augmented reality.
"Projects that don't directly contribute to these areas will be discontinued or receive substantially reduced investment," he mentioned.
Snap has made the decision to discontinue investments in Snap Originals, Minis, Games, and Pixy, among other areas.
"We have also started the process of winding down the standalone applications Zenly and Voisey," said the CEO.
Team leaders will now notify their impacted team members as soon as possible and provide them with detailed guidance.
In the US, the company will provide at least four months of compensation replacement, as well as financial assistance, so that team members will have until the end of the year to find new opportunities while still receiving compensation and health benefits from Snap.
"Outside the US, we will follow local processes required in each country and tailor compensation and benefits to reflect local norms with the intent to provide similar levels of support regardless of geography," said the CEO.
"We will also provide outplacement service support and launch an opt-in talent directory to help departing team members connect with new opportunities," he added.
Snap is promoting Jerry Hunter to Chief Operating Officer, effective from Wednesday, who will lead monetisation efforts across three operating regions (EMEA, APAC, and Americas), as well as Growth, Partnerships & Content, AR Enterprise, and SMB teams.
Spiegel also realigned regional operational leadership by creating a new President role in each of the Americas, EMEA and APAC regions.