People familiar with the matter told The Verge that Snapchat is reportedly planning to lay off some of its employees after reporting disappointing financial results for the second quarter ended June 30.
The sources said that the plan is still in its early stages and it is not clear yet how many employees will be affected. The social media company currently has over 6,000 employees.
Snapchat’s business has been heavily impacted by Apple’s App Tracking Transparency (ATT) feature which now gives iOS users the ability to opt out of ad tracking. In Q3 2021, the company said Apple’s privacy changes hit its ad business, causing it to fail meeting its revenue targets. A few weeks after posting its Q3 results, one of its investors sued the social media company alleging that it downplayed how Apple’s changes put its ad business at risk.
In the following quarter, the company reported a 42% Y/Y rise in revenue which hit $1.3 billion, suggesting that its ad business recovered from the impacts of ATT faster than expected.
Also Read: Snapchat Revenue and Usage Statistics (2022)
However, the second quarter of this year wasn’t also very fruitful for Snapchat, due to the economic slowdown this time. The company reported a revenue of $1.11 billion for Q2 2022, failing to meet analysts’ projection of $1.14 billion.
“We are not satisfied with the results we are delivering, regardless of the current headwinds,” the company said in its letter to investors, adding that it won’t provide guidance for Q3 as ‘’it is unclear how the headwinds we observed in Q2 will evolve as we move through Q3’’. Following the announcement, the company’s shares plunged 25%.
In addition to Snapchat, the economic slowdown also caused many other tech firms to either lay off employees or slow down hiring, including Meta, Google, Twitter, Shopify, Robinhood and Niantic.