Snap Inc., the parent company of the social network Snapchat, announced on Monday that it will reduce its global workforce by 10 percent, affecting about 528 employees. The company, founded in 2011, intends to set aside a budget of 55 to 75 million dollars to cover separation costs related to the layoffs. It remains unclear which departments will be impacted as regulators review the plan.
Snap has endured several difficult years. Its stock price declined significantly during 2022, and the company embarked on a broader restructuring that included a 20 percent headcount reduction. A further 3 percent cut followed in 2023, after which the company recovered in some areas and posted a notable rebound of over 83 percent in value. Yet, in April it reported a first revenue decline in the modern era, driven by softer advertising demand and a slower pace of user growth.
There are glimmers of optimism in Snap’s narrative. In the latter part of the year, the user base showed resilience, reaching an impressive milestone by maintaining around 750 million monthly active users, a testament to Snapchat’s continued pull as a popular global social platform. The company has also seen a modest rise in stock value, reflecting renewed investor interest this year.
Under the leadership of cofounder and CEO Evan Spiegel, Snap has pursued diversification, aiming to broaden revenue streams beyond core social networking. Initiatives such as augmented reality features and new subscription services have been explored, with some experiments not fully materializing as hoped. Management has highlighted the goal of increasing average revenue per user through expanded daily engagement by about a fifth, while Snapchat Plus has attracted more subscribers, signaling momentum in paying user segments. Time will tell which bets pay off and how the product and monetization mix evolves in the competitive digital landscape.
The current layoffs fit into a broader pattern of employment adjustments across the U.S. technology sector. In recent years, major players including Google, Instagram, Amazon, Twitch, Microsoft, TikTok, PayPal, eBay, and Riot Games have announced workforce reductions. Industry-wide, the tally stands at tens of thousands of roles cut across hundreds of companies, reflecting shifts in digital advertising, platform monetization, and strategic restructuring as the market adapts to changing demand and economic conditions.