Snap Inc CEO Evan Speigel announced in a note on Friday that the company had made the difficult decision to reduce the size of its workforce by about 20%.
The note said this new round of layoffs comes after the company experienced slow revenue growth, falling share prices and a general lag in its financial goals. Speigel shared:
“Our revenue visibility going forward remains limited, and our current quarterly revenue growth of 8% is well below what we expected at the beginning of the year.”
Snap Inc. will now embark on the restructuring task in an attempt to ensure the company’s success in a highly competitive space where Instagram and TikTok currently dominate. As part of its restructuring process, the company has laid off its entire Web 3.0-focused division. Jake Sheinman, head of Snap’s Web 3.0 team, announced his departure from the company on Wednesday in a series of Twitter posts in which he stated:
“As a result of company restructuring, the decision was made to terminate our Web 3 team.”
I’m humbled to have partnered with the smartest builders, most creative artists, and kindest humans. Today was tough and I’ll miss this place dearly but I’m grateful for all of it. Will be taking some personal time in the coming weeks but open to discuss new opportunities
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— Jake Sheinman (@jakeryanshein) August 31, 2022
I am honored to have partnered with the smartest builders, most creative artists, and kindest human beings. Today has been a hard day and I will miss this place very much, but I am grateful for all of it. I will be taking some personal time in the next few weeks, but I am open to discussing new opportunities.
Speigel explained that the restructuring is part of an effort to focus on three strategic priorities: community growth, revenue growth and augmented reality (AR). Projects not in line with these areas will be put on hold or see their budgets significantly reduced.
At the moment, it looks like Snap isn’t going to prioritize the nascent Web 3.0 space and the metaverse as much as its competition, like Meta. Although many tech innovators seem to share the view that Web 3.0 is going to be the next iteration of the internet, Snap doesn’t seem interested in positioning itself within the blockchain industry.
Snap’s layoffs come after other tech companies including Coinbase, LinkedIn, Meta, Apple, Google and Netflix have had to downsize due to rising interest rates in an inflationary economy.
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