Snapchat’s most recent quarterly revenue growth was reported to be well below the business’ expectations from earlier this year
Snapchat has around 347 million users globally
Snapchat will make 1300 staff members redundant as the company grapples with a downturn in advertising income.
The move to reduce Snapchat’s 6400-strong workforce by 20% was decided in order to “substantially reduce the risk of ever having to do this again”, said CEO Evan Spiegel.
He added this was in addition to balancing the company’s desire to invest in its long term future and reaccelerate revenue growth.
Snapchat will provide at least four months of compensation replacement to support affected staff, who will still receive compensation and health benefits from the business.
“We will miss the many kind, smart, and creative team members who have contributed to Snap’s growth and I am deeply sorry that these changes are necessary to ensure the long term success of our business,” said Spiegel.
“The friendship and camaraderie we all share as a team make these changes particularly painful, and we will make every effort to treat our departing team members with the respect and gratitude that they deserve.”
The messaging platform's most recent quarterly revenue growth was reported at 8%, which is well below the business’ expectations from earlier this year.
Snapchat also issued a profit warning in May, resulting in a 25% share crash, which was followed by disappointing Q2 2022 results that saw net losses of $422m.
Apple's recent privacy changes have had a significant effect on how social media websites use targeted digital ads, exacerbating the current situation for Snapchat.
The company said it will also refocus its investment priorities on community growth, revenue growth and augmented reality.
Projects that do not directly contribute to these areas will be discontinued or receive substantially reduced investment.
This includes Snap Originals, Minis and Games in addition to the company’s standalone applications Zenly and Voisey.
“Changes of this magnitude are never easy, and we must act decisively to meet this moment as a team,” said Spiegel.
“I am proud of the strength and resilience of our team as we have navigated the myriad challenges of growing our business in a highly competitive industry during uncertain and unprecedented times.
“Thank you for your dedication, hard work, and commitment to our community.”