Social media giant Snap, which operates Snapchat, has announced plans to cut “approximately” 10% of its staff.
The firm said in November 2023 it had 5,000 employees, suggesting around 500 people are facing redundancy.
This comes a day before Snap reports its fourth-quarter results – having reported a net loss of $368m (£294m) in the previous quarter in October 2023.
Snapchat said the move would “reduce hierarchy and promote in-person collaboration”.
“We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap,” a spokesperson told the BBC.
According to its most recent annual report, more than 500 people work for the firm in the UK. It is unclear if any of the cuts will fall in the UK.
Jasmine Enberg, principle social media analyst at Insider Intelligence, told the BBC the layoffs “don’t bode well for the state of Snap’s business” ahead of its latest earnings announcement on Tuesday.
She pointed to rival Meta’s latest results – which showed quarterly profits tripling year-on-year, a surge in users, lower costs and higher ad sales – as “a tough act for Snap to follow”.
“Snap is likely trying to garner some goodwill with investors, who rewarded its competitor for its cost-cutting measures and its continued ‘do more with less’ mantra going into 2024,” Ms Enberg said.
She added that Snap’s advertising revenues have been “slow to recover from the digital ad slowdown”.
It is the second wave of mass redundancies from the social media company, which laid off about 20% of its workers in August 2022.
Snap has attempted to expand into products beyond Snapchat, including experimenting with augmented reality (AR) glasses, dubbed Spectacles. But the firm has been unable to find a mass market for its other products, and it subsequently closed a division that offered AR services to business customers in 2023.