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    Tuesday, August 9, 2022

    Snap Plans to Lay Off Employees Amid Fundamental Woes

    An American camera and social media company, Snap Inc. is in early stages of planning layoffs, the Verge reported on Monday, citing people familiar with the plans.

    The scope of the job cuts is currently unclear as managers are still planning it for their teams, the report said, adding that the Snapchat-owner has more than 6,000 employees.

    Snap declined to comment when contacted by Reuters.

    The development comes as technology companies, crypto exchanges, and financial firms cut jobs and slow hiring as global economic growth slows due to higher interest rates, red-hot inflation and an energy crisis in Europe.

    Facebook-owner Meta Platforms cut plans to hire engineers by at least 30 percent this year, CEO Mark Zuckerberg had told employees on June, and he warned them to brace for a deep economic downturn.

    Snap CEO Evan Spiegel also told employees in a memo in May that the company will slow hiring for this year and laid out a broad slate of problems.

    Last month, the company painted a grim picture of the effects of a weakening economy on social media and declined to make a forecast in "incredibly challenging" conditions, sending its shares down 25 percent.

    It was reported last month that the Snapchat's owner plans to "substantially" slow recruitment after bleak results wiped 25 percent off the stock price of the tech firm, which is facing difficulties on several fronts.

    Snap reported that its loss in the recently ended quarter nearly tripled to $422 million despite revenue increasing 13 percent under conditions "more challenging" than expected.

    "We are not satisfied with the results we are delivering, regardless of the current headwinds," California-based Snap said in a letter to investors.

    The firm pointed to a punishing confluence of increased competition, slowing growth of its revenue, "upended" advertising industry standards and macroeconomic woes.

    Snap share price was around $12 in after-hours trading in the wake of the earnings report.

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