Snap is cutting 10 percent of its staff

Snap plans to lay off around 10 percent of its employees as the company continues to struggle with declines in the digital advertising market. The company had around 5,300 employees at the start of 2023. Snap previously cut 20 percent of its staff in 2022 and had a smaller cut of 3 percent in 2023.

Snap has struggled to expand beyond its core social networking product. Its augmented reality glasses were never made widely available, and other hardware projects like a selfie drone were scrapped shortly after launch. Even products launched within Snapchat, like the TikTok-esque Spotlight and the Snapchat Plus subscription service, have failed to grow at the pace the company hoped for.

Meanwhile, the company has faced the same challenges as other tech and media companies in recent years: a shrinking ad market and the challenges of dealing with Apple’s limitations on user tracking on iOS. The company’s revenue rose in the third quarter of 2023, but that came after two quarters of declines. Snap is scheduled to report its fourth quarter 2023 earnings tomorrow afternoon.

Snap didn’t say where the layoffs would be focused. The company said the cuts were meant to “best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time.” The company expects to spend up to $75 million on severance and related costs.

Evan Spiegel, Snap’s CEO, has set ambitious goals for 2024. The company hopes to grow daily users by around 17 percent, bump ads revenue by 20 percent, and double Snapchat Plus subscribers from the current 7 million, as my colleague Alex Heath reported in October. But the company has consistently missed its own internal targets while burning through cash.