Snap to let go of 10% of its workforce in it’s first round of severance and job cuts

In a new round of layoffs, social media behemoth Snap has chosen to let go of 529 workers, or 10% of its workforce. According to a regulatory filing by the company, the parent company of Snapchat anticipates pre-tax charges of between $55 million and $75 million, primarily from severance and related costs.

Between $45 and $55 million of this amount are anticipated to come from future monetary outlays. It also stated that the first quarter of 2024 is anticipated to be the main timeframe for incurred costs. Pre-market trading saw a 2% increase in Snap’s share price.

“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.,” Snap issued a statement with the SEC.

According to a CNBC article, the tech industry continues to experience a massive wave of layoffs, with 24,000 tech professionals losing their jobs in January alone. The massive video conferencing company Zoom and the cybersecurity and identification business Okta are among the most recent fatalities.

Investor viewpoint ‘

Investor support for IT companies’ streamlining initiatives appears to be behind the latest round of layoffs. One example of this is Meta’s “year of efficiency,” which included significant worker cutbacks.

After the company announced its first dividend and had solid profitability, Meta’s stock saw an all-time high surge. These experts assert that despite growing scrutiny and difficulties in the tech sector, investors see deliberate cost-cutting tactics as positive.