Snap Announces 10 Percent Job Cuts as Tech Layoffs Continue in 2024

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Over 32,000 tech employees have been laid off by over 100 firms since the start of 2024.

Snap Inc., the parent company of Snapchat, will be terminating over 500 workers, becoming the latest tech company to lay off a large number of employees this year.

“On February 5, 2024, we announced a plan to reduce our global headcount by approximately 10 percent of our global full-time employees,” Snap said in a filing with the U.S. Securities and Exchange Commission (SEC) on Monday.
At the end of the third quarter (Q3) in 2023, Snap had 5,367 employees. As such, a 10 percent cut would mean approximately 536 workers being laid off.

Snap justified the decision, stating that it was necessary to “best position our business to execute on our highest priorities” and to ensure that the company had the “capacity to invest incrementally to support our growth over time.”

The firm expects the pre-tax cost of layoff to be $55 million to $75 million, mainly consisting of severance and related costs and other charges. “The majority of these costs are expected to be incurred during the first quarter of 2024,” the company said in the SEC filing.

As job eliminations are subject to various local laws of each nation, the process could extend into 2024’s Q2 or beyond in some countries, it said.

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The layoffs come as Snap reported Q3 earnings that beat analyst estimates for revenue and earnings per share. However, the company’s net loss grew by 2 percent year-over-year to $368 million.

Snap, which is dependent on ad publishing for revenues, also cautioned that the ad market remained volatile and that some of its clients had paused their advertising campaigns.

“The layoffs don’t bode well for the state of Snap’s business ahead of its Q4 2023 earnings,” Jasmine Enberg, a principal analyst at research firm Insider Intelligence, told Techcrunch. “We expect Snap to report a 2023 year-over-year ad revenue decline of 3.3 percent.”
Snap shares were trading in the red as of 12:45 p.m. EST on Monday.
Since 2022, the company has executed multiple layoffs. In 2022, the firm terminated 20 percent of its staff amid a restructuring initiative. More recently, in November, it laid off around 20 employees.
The tech firm has also faced difficulties in other ventures. AR Enterprise Service, which was announced in March 2023, shut down a few months later in September. Snap’s investments in hardware products like the Pixy drone and Snap Spectacles have also not worked out.

Tech Layoffs

Snap is the latest tech firm to join the layoff bandwagon this year. According to data from Layoffs.fyi, 130 tech companies have laid off 32,576 employees as of Feb. 6. In 2023, over 262,000 tech workers were laid off—an increase from 2022 when more than 165,000 employees were terminated.

Last month, Google fired a few hundred employees from several of its divisions.

In a Jan. 30 announcement, PayPal said the firm would reduce its global workforce by roughly 9 percent to “right-size” its business.

Microsoft also recently revealed plans to lay off 1,900 employees from its Activision Blizzard and Xbox departments, representing 8 percent of the company’s gaming division workforce.

In an interview with Axios, Roger Lee, the creator of Layoffs.fyi, said that the current cycle of terminations can help reset the expectations of young tech employees.

He said that the view of the tech industry being a gateway to getting rich quickly was an “unrealistic” perception, with the idea born at a time of “excess.”

The job market has yet to bounce back fully, and many tech workers are finding it hard to find suitable roles, Mr. Lee stated.

Dorie Clark, an executive coach, told the outlet that tech firms were “rolling in money” and “desperate for tech workers” over the past 10–20 years.

When such conditions ended, executives were “psychologically unsettled,” she said, adding that many tech workers realized that their jobs were not “safe” in a permanent way.

However, not all companies laying off workers are in tight financial situations. Big firms like Amazon, Microsoft, and Meta have conducted mass layoffs over recent years despite being in a robust financial position.

Speaking to NPR, Jeff Shulman, a professor at the University of Washington’s Foster School of Business, called the situation a “herding effect in tech.”

“The layoffs seem to be helping their stock prices, so these companies see no reason to stop,” he said. Higher stock prices mean satisfied investors.

“They’re getting away with it because everybody is doing it. And they’re getting away with it because now it’s the new normal. … Workers are more comfortable with it, stock investors are appreciating it, and so I think we’ll see it continue for some time,” Mr. Shulman added.

In a recent report, career transition specialist Challenger, Gray & Christmas, Inc. said that out of the 82,307 job cuts by businesses across various industries in January, the tech sector accounted for 15,806 of them—the most since May last year. It is also 254 percent up from December.

“As we step into 2024, the landscape is shaped by stabilizing prices and the anticipation of falling interest rates. It is also an election year, and companies begin to plan for potential policy changes that may impact their industries,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.

“However, these layoffs are also driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs.”



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