The parent company of social media platform Snapchat is laying off 20% of its staff as it tries to reduce costs in the face of declining sales, the company said Wednesday.
CEO Evan Spiegel said in a letter to staff posted on Snap's website that sales were not keeping up with projections.
"Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses," he wrote. Spiegel said Snap is restructuring its business to focus on community growth, revenue growth and augmented reality. Anything that doesn't contribute to those areas"will be discontinued or receive substantially reduced investment," he said.
Last fall, Snap said its ad sales were being hurt by a privacy crackdown that rolled out on Apple's iPhones, which raised investor fears about the app's potential for growth. Most social media platforms rely heavily on advertising revenue. Since Snap posted its first-ever profitable quarter in the last three months of 2021, there has been little good news from the company.