Snap will lay off 20 percent of its workforce, according to a new report.
The social media company's cuts will impact 1,300 of its 6,400 employees. It will also close down several divisions, including ones dedicated to drone hardware and a social mapping app (Zenly). “While we will continue our work to re-accelerate revenue growth, we must ensure Snap’s long-term success in any environment,” Snap CEO Evan Spiegel wrote in an internal email quoted by The New York Times. “I am deeply sorry that these changes are necessary to ensure the long-term success of our business.”
The move didn't come as a total surprise; in a report released a few hours ahead of Snap's announcement, The Verge suggested that planning for the layoffs has been underway for several weeks. Like many other companies (including Meta/Facebook, its arch-rival), Snap has seen its stock price plunge this year. In pursuing layoffs, it will follow in the footsteps of companies like Robinhood and Coinbase that have also made workforce cuts in recent months.
Earlier this year, Spiegel announced that his company would slow hiring through the end of the year, citing the need to manage budgets. Apple’s latest privacy controls for the iPhone, which curtail the amount of lucrative user data available to advertisers, have also presented a significant challenge to Snap, Meta, and other social-media companies. Layoffs are a likely sign that Snap’s issues have deepened since Spiegel’s announcement.
Whatever the future holds, Snap will continue to need smart technologists if it wants to survive and grow. Traditionally, the company has been more than willing to pay for talent: According to levels.fyi, which crowdsources its salary data, an entry-level software engineer at Snap (i.e., L3) can earn $135,366 in base salary, on top of annual stock options worth $53,488 and a bonus of $11,996 (for a total of $200,850). Those who rise to an L7 level can make quite a bit more: $242,000 in salary, $528,000 in stock, and $23,800 in bonuses (totaling $793,000).
Although tech companies are slicing budgets and considering layoffs, it’s important to remember that the overall tech unemployment rate continues to dip, hitting 1.7 percent in July (down from 1.8 percent in June). Outside of tech, various industries need all kinds of technologists for everything from building websites to maintaining cybersecurity.
