A report from The Verge says that Snapchat's plan of laying off employees will now start on Wednesday this week, reducing 20% of the 6,400 people that the company hired.
The team and the developers that have been working on 'Minis,' and the department of 'Zenly,' will be experiencing the reduction of employees the most, as the report stated. This will also hit the team that has been working on the company's hardware division.
Despite the reports from different sources, Snapchat's spokesperson Russ Caditz-Peck did not give a comment regarding this matter.
Snapchat's Difficulties for 2022
The decision of the company was not a surprise to some as its planning was announced earlier this month. Adding to this is the decrease in Snapchat's stock price, losing 80 percent of the company's value earlier this year.
Following these problems was the statement from Chief Executive Officer Evan Spiegel last May that the company is experiencing the effects of rising inflation and interest rates, supply chain, and labor disruptions. As a result, 500 employees will only be hired by the company, a much lower number of people if comparing it to the company's former goal of 2,000.
He stated, "Moving forward, we will be taking steps to reprioritize our investments - continuing to invest across our business priorities, but in many cases doing so at a slower pace than we had planned given the operating environment."
Possible Factors
When the pandemic happened, Snapchat hired people aggressively as it welcomed 3,427 newly hired people, which increased its employment rate to 38 percent. WaveOptics, the AR displays supplier for Spectacles, was also a factor in the company's recent problems as it was the largest purchase of the company last year for more than $500 million.
The company also discontinued the recently introduced product just this April, the Pixy Selfie Drone. Spiegel stated that the decision was made as Snapchat wants to focus on different priorities, based on a report from The Wall Street Journal.
Following the layoffs is the sudden resignation of Snapchat's Chief Business Officer and Top Ad Executive Jeremi Gorman, and Vice President of Ad Sales, America Division Peter Naylor. The departures of these executives were confirmed by the company's spokesperson.
AdAge also confirmed that the two former employees will be joining Netflix to lead the newly added Ad-Supported plans. Netflix Spokesperson Kumiko Hidaka stated that Gorman will be the President of Worldwide Advertising while Naylor will lead the Ad Sales Department.
Chief Operating Officer Greg Peters, the person in charge of the two, said that both of their experiences will be the solution to the company's expansion regarding the membership options as they offer Ad-Supported plans for its customers.
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Written by Inno Flores
