Snapchat will lay off 20% of its staff and shut down new projects.
About 1,200 employees will lose their jobs in the restructuring which had been expected after a year of poor financial results. The company was worth $130bn a year ago. It’s now valued at less than $20bn.
Snapchat said the cuts would help the company save an estimated $500m in annual costs. The company’s CEO said the changes would be “difficult”.
Despite reducing spending in some areas, Snapchat must now “face the consequences of our lower revenue growth and adapt to the market environment,” its CEO Evan Spiegel said.
Mr Spiegel said he wanted to focus the company’s attention on its traditional lifeblood – making money from advertising.
Social media companies like Snapchat, Meta and Twitter have all struggled recently as the vast majority of their revenues are based on advertising.
Snapchat has also been affected by privacy updates by Apple – introduced last year.
The changes have made it more difficult for advertisers to track people on their phones – which makes targeted adverts less focused.
