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By Catherine Thorbecke, CNN Business
Snap Inc. is the parent company of the popular app Snapchat. It has announced plans to lay off 20 percent of its more than 6,400 global employees.
The news affects the jobs of more than 1,200 employees at the technology giant, and comes as broader economic conditions have worsened in recent months and the Federal Reserve has raised interest rates. The recent market crash has particularly crippled the technology sector, which has been dominated by news of hiring, layoffs and other cost-cutting measures for months.
Snap CEO Evan Spiegel broke the news Wednesday in a statement shared with CNN Business, saying the company is restructuring to focus on “three strategic priorities: community growth, revenue growth and virtual reality.”
“As a result, we are sunsetting several projects, reducing the size of our team by approximately 20 percent, and announcing the promotion of Jerry Hunter to Chief Operating Officer,” Spiegel’s statement added.
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The CEO continued, “Changes of this magnitude are always difficult, and we are focused on supporting our outgoing team members through this transition. Many thanks for your many contributions to Snap.
Snap reported having 6,446 full-time employees in the second quarter of 2022, according to a filing with the U.S. Securities and Exchange Commission.
Snap stock is down more than 75% since the start of the year. Shares of Snap suffered a major decline last month after the company posted dismal sales growth and warned investors that the economy was deteriorating faster than expected.
In a separate memo to employees from Spiegel, shared publicly online, the CEO said leaders would notify those affected as soon as possible.
“In the United States, we offer at least four months of compensation replacement and financial assistance to enroll in COBRA, allowing team members to access new opportunities while receiving compensation and health benefits through the end of the year. From Snap,” he wrote.
He added that “the magnitude of this reduction” should “significantly reduce the risk of doing this again”.
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