Snap confirmed that it would be cutting its 6,500-strong workforce by a fifth as it struggles to ride the advertising slump.
The social media chief Evan Spiegel said in a statement yesterday that the company restructuring was based on three “strategic priorities”, including community growth, revenue growth and augmented reality.
“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,” he said.
Snapchat’s parent company said current year-over-year quarter-to-date revenue growth of eight was “well below” what it was expecting earlier this year.
Like its Silicon Valley rivals, Snap warned in its second quarter letter that the demand growth on its advertising platform had “slowed significantly”.
The company said it is seeing “increasing competition for advertising dollars that are now growing more slowly”.
Shares have also had to battle with a wider tech sell-off, which has seen its stock plunge 74 per cent in the last six months alone.
Google and Meta have both said they would halt hiring as the Big Tech feels the sting from dwindling ad budgets.
Shares climbed nearly 10 per cent following the news yesterday.