In a letter to staff posted on
“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 wrote.
Spiegel said Snap was restructuring its business to focus on community growth, revenue growth and augmented reality. Anything that doesn't contribute to those three areas “will be discontinued or receive substantially reduced investment,” Spiegel said.
Last fall, Snap said its ad sales were being hurt by a privacy crackdown that rolled out on Apple’s iPhones, which raised investor fears about the app’s potential for growth. Most social media platforms rely heavily on advertising revenue, one reason that Facebook has been an outspoken critic of Apple's recent changes to privacy controls.
Since Snap posted its first-ever profitable quarter in the last quarter of 2021, there has been little good news from the company.
On
Snap’s staff has grown to more than 5,600 employees in recent years and the company said even after laying off more than 1,000 people, its staff will be larger than it was a year ago.
Like most other social media companies, Snap boomed during the pandemic when workers and students spent longer hours online at home. Snap shares peaked in late September of 2021 at more than
Snap shares gained about 10% on Wednesday, to
Snap said it was halting investment in Snap Originals, Minis, Games, Pixy, and other segments. It also said it is “winding down” the standalone apps Zenly and Voisey.
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