Snapchat’s parent company Snap to lay off over 520 or 10% of employees to ‘reduce hierarchy’

The decision, outlined in a filing with the US Securities and Exchange Commission (SEC), is part of Snap’s strategy to support future growth.

The SEC filing explained the necessity of restructuring the team to align with the company’s highest priorities and ensure the capacity for incremental investments in support of long-term growth. The move is anticipated to incur pre-tax charges ranging from $55 million to $75 million, primarily covering severance and related costs, with $45 million to $55 million expected to be future cash expenditures.

Snap stated that a majority of these costs would be incurred in the first quarter of 2024, but local regulations and other factors might extend some expenses into the second quarter. The company, set to report earnings after the market’s close on February 6, emphasized the reorganization’s focus on reducing hierarchy and fostering in-person collaboration.

This recent round of layoffs follows a smaller reduction in headcount late last year when Snap reorganized its product team to streamline decision-making and reduce layers. In 2022, the company also underwent a larger restructuring, cutting 20 per cent of its staff.