Snap, Snapchat’s parent company, is cutting 10 percent of its workforce. and confirmed by a company spokesperson. The company reported a total of 5,367 employees at the end of the third quarter of 2023, so the layoffs should affect about 540 people.
Snap discussed the decision in SEC filings, saying the layoffs “will best position our business to execute on our highest priorities” and will have “the ability to invest more” over time. The company told us the layoffs were necessary to “reduce hierarchy and encourage personal collaboration.” None of those sentences really mean anything, so let’s go with “corporate restructuring.”
Snap said in the filing that it will provide severance packages to affected employees, but was not specific about package details. A Snap spokesperson confirmed this Engadget he is “focused on supporting our outgoing team members.”
The cuts come a day before Snap is scheduled to report earnings for the fourth quarter of 2023. The company actually performed quite well in Q3, beating Wall Street expectations by nearly five percent.
If tomorrow’s earnings report is bad, it will show why these layoffs are necessary. On the other hand, if it does better than expected, Snap could announce those layoffs now to avoid doing so after a quarter of fiscal earnings. No one wants to see a big company massively downsize their workforce after bragging about their earnings. Snap said the company is in a “quiet period” until tomorrow’s Q4 financial report.