Snap Inc., the company behind social media giant Snapchat, is just the latest in a long line of top-tier firms forced to make cutbacks and fire employees due to the continuing worldwide financial crisis. The company is letting go of about 20% of its total workforce, including 30 people at its research and development center located in Herzliya, Israel.
Snap expects to save about $500 million per year by making these cutbacks.
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Snapchat also said that it will be winding down its standalone applications Zenly and Voisey as well as discontinue its Pixy flying drone camera. And the company promoted Jerry Hunter to the position of Chief Operating Officer. He will lead its monetization efforts across our three operating regions (EMEA, APAC, and Americas), as well as Growth, Partnerships & Content, AR Enterprise, and SMB teams.
Founded by Evan Spiegel and Bobby Murphy, Snap Inc. started as a camera company. But the company became a hit with its Snapchat app which competes directly with Instagram.
In a letter to employees, Evan Spiegel explained the move saying, “We are restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality. Projects that don’t directly contribute to these areas will be discontinued or receive substantially reduced investment. We have worked thoughtfully and deliberately to find the right balance between focusing our investments while continuing to innovate, and we have made the decision to discontinue our investments in Snap Originals, Minis, Games, and Pixy, among other areas.”
Evan Spiegel tried to assuage the concerns of Snapchat’s remaining staff saying, “Changes of this magnitude are never easy, and we must act decisively to meet this moment as a team. I am proud of the strength and resilience of our team as we have navigated the myriad challenges of growing our business in a highly competitive industry during uncertain and unprecedented times. Thank you for your dedication, hard work, and commitment to our community.”