Snap is Laying Off 20% of its Staff and Canceling Projects

Snap has just announced major layoffs as the company is forecasting lower revenue growth in the near future. The Snapchat company will be laying off 20% of its workforce, and it’s also canceling some of its projects to cut costs across the organization.

Snap Inc. CEO Evan Spiegel announced the bad news today in a memo sent to all employees. The full memo has also been published on Snap’s newsroom, and it’s a nice display of transparency for a company known for its disappearing messages feature.

“The investments we have made in our business to date assumed a higher rate of revenue growth based on our vast opportunity and our proven history of execution, including 2x growth in the size of the Snapchat community and 10x growth in trailing twelve month revenue since our IPO in 2017. Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses, Spiegel explained.

The Snap CEO went on to explain that the company will refocus on “community growth, revenue growth, and augmented reality,” and that all projects that don’t directly contribute to these three strategic priorities will be discontinued. “We have made the decision to discontinue our investments in Snap Originals, Minis, Games, and Pixy, among other areas. We have also started the process of winding down the standalone applications Zenly and Voisey,” the exec said.

In his memo, the Snap CEO emphasized that Snap’s workforce after the layoffs will still remain bigger than what it was a year ago. “The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long term future and reaccelerate our revenue growth,” the CEO added.