Snapchat is reportedly planning to lay off nearly 100 engineers within a week, according to a news report.
Tech website Cheddar late on Wednesday reported that the layoffs would affect less than 10 percent of Snap’s engineering department.
Citing sources, Cheddar also said that the planned layoffs would be Snap’s biggest to date.
This third round of layoffs comes after Snap cut the jobs of a couple dozen employees across its hardware and recruiting divisions 2017. This was followed by two dozen more cuts in January.
Snap slowed its hiring rate by nearly 60 percent last quarter and reported having 3,069 employees at the end of 2017.
During the same time, Snap instituted a company-wide system for evaluating employee performance and company CEO Evan Spiegel then told managers that “they would be required to make ‘hard decisions’ about evaluating their teams going into the 2018 calendar year”.
The report also noted that Snap withheld cash bonuses for employees at the end of 2017 because of failure to meet company-wide goals. More daily average users Snapchat grew faster than Facebook in the fourth quarter of 2017 in the US.
Snap was quoted as saying that its daily average users in the region during the fourth quarter of 2017 rose five percent from the prior quarter to 80 million.
The credit of Snapchat’s growth went to Spiegel’s design overhaul of the app that was unveiled in November 2017 that helped the company reclaim some of its popularity that waned after Facebook’s launch of Instagram “Stories”.
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Commenting on the report, Yuval Ben-Itzhak, CEO, Socialbakers, said: “It is never a good sign when a technology company lays off engineers thus the news that Snap is laying off 100 engineers, reportedly 10% of its engineering workforce, does not bode well for the platform. Snap’s future as a tool for marketers has long been in question and the platform has hit a series of hurdles as it tries to measure up to its biggest rival, Instagram.
“Cost and metrics are currently a drawback for marketers looking at investing budget in Snapchat. According to research by Buffer, Instagram ads often cost less than Snapchat ads, and Instagram has more viewability metrics than Snapchat. Currently, having a programmatic access (APIs) to the Snapchat platform requires special permission from Snapchat. This means that both marketers and advertisers have no programmatic access to learn about the audience and know what content to create and how to target. Snapchat is open just for a selected number of brands.
There has been speculation of an acquisition by Apple, which doesn’t sound so far-fetched since Tim Cook clearly stated that augmented reality is the way forward and Snap is leading the way in AR technology. But whether these reductions in headcount could have an impact on a possible acquisition of the platform remains to be seen.
