Technology companies are in the midst of a rough patch, and the latest to join has been Snap. The social network announced Monday that it is laying off 10% of its global workforce, a total of 529 employees. The news was revealed by the company itself in a document published Monday by the U.S. Securities and Exchange Commission (SEC):
On February 5, 2024, we announced a plan to reduce our global headcount by approximately 10% of our global full time employees. In order to best position our business to execute on our highest priorities, and to ensure we have the capacity to invest incrementally to support our growth over time, we have made the difficult decision to restructure our team.
It is the third round of layoffs that the company has seen since 2022. According to NBC News, Snap laid off 20% of its staff in August of that year, which, at that time, cost 1,000 people their jobs. After this, it had another small round of layoffs, just 3% of its workforce, in November of last year.
Snap not saving money with layoffs
It should be noted that the new round of layoffs will not reduce economic expenses. Per the SEC report, the company expects to have to pay "in the range of $55 million to $75 million" in compensation alone:
As a result, we currently estimate that we will incur pre-tax charges in the range of $55 million to $75 million, primarily consisting of severance and related costs, and other charges, of which $45 million to $55 million are expected to be future cash expenditures. The majority of these costs are expected to be incurred during the first quarter of 2024. Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process into the second quarter of 2024 or beyond in certain countries. The charges that we expect to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above.
