Snap has disclosed its decision to trim 528 employees, constituting 10 percent of its global workforce.
Snap, the parent company of Snapchat, cited the need to strategically position its business for optimal execution of priorities and to create capacity for incremental investments supporting long-term growth as the rationale behind the restructuring. The social media company acknowledged the difficulty of the decision in a statement.
The job reduction at Snapchat is anticipated to result in pre-tax charges ranging from $55 million to $75 million. These charges will primarily cover severance and related costs, alongside other expenses. Notably, $45 million to $55 million of these charges are expected to materialize as future cash expenditures, with the majority occurring in the first quarter of 2024.
This move aligns Snap with several other tech and media companies, including Amazon and Alphabet, both of which announced layoffs in January. According to Layoffs.fyi, a tracking website, approximately 32,000 workers have been laid off across 122 tech companies since the beginning of the year.
The tech sector has been particularly impacted, shedding 168,032 jobs in 2023, making it the industry with the highest number of layoffs, according to a report by Challenger, Gray and Christmas released earlier this month.
Microsoft alone accounted for over 10,000 job cuts in that period. The ongoing workforce adjustments across various tech companies reflect the challenges posed by economic uncertainties in the industry, Reuters news report said.