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Monday, February 5, 2024

Snap to lay off 10% of global workforce, around 500 employees

Snap said it will lay off 10% of its workforce worldwide, around 500 employees, to “promote in-person collaboration.”
  • The company’s last major round of cuts was in August 2022, when it laid off 20% of staff and restructured its business lines.
  • Snap CEO Evan Spiegel testified before the Senate Judiciary Committee last week, one of several social media executives to face scrutiny over the damage their platforms caused young people.
  • The social media platform is the latest tech company to continue cutting in 2024. Nearly 24,000 tech workers lost their jobs in January alone. Already this month, cybersecurity and identity company Okta and Zoom have laid off staff.
  • Snap stock remains below its debut price and well off its 2021 high of around $83.

Snap announces plans to reduce headcount by approx. 10% of global full time employees; will incur pre-tax charges of $55-$75 mln related to the headcount reduction
  • Per a filing, "In order to best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team."
  • As a result, SNAP currently estimates that it will incur pre-tax charges in the range of $55 million to $75 million, primarily consisting of severance and related costs, and other charges, of which $45 million to $55 million are expected to be future cash expenditures. The majority of these costs are expected to be incurred during the first quarter of 2024. Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process into the second quarter of 2024 or beyond in certain countries. The charges that they expect to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above.

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