Snap Inc. will lay off over 1,200 employees, representing 20% of its total workforce, company CEO Evan Spiegel confirmed in a memo. He justified the move by saying the company "must reduce our cost structure to avoid incurring significant ongoing losses" as its current-quarter revenue growth rate of 8% "is well below what we were expecting earlier this year."
Spiegel added Snap will focus on community growth, revenue growth, and augmented reality, and "projects that don’t directly contribute to these areas will be discontinued or receive substantially reduced investment," including Snap Originals, Minis, Games, and Pixy. The company will also wind down the standalone applications Zenly and Voisey.
Snap shares surged 4.40% after the announcement.
