It appears that Snap Inc, parent company of picture, video, and text messaging app Snapchat, can’t catch a break. Following a tumultuous 2017 which included the company going public, plummeting stock prices and product failures like the Spectacles sunglasses, Snap Inc actually reported better than expected earnings for last quarter, propelling share prices in February to the highest they have been since the company’s IPO. For a brief period, the future looked bright for Snapchat, and Wall Street seemed to agree.
Unfortunately for Snap, it now seems this optimism was too good to be true. On Wednesday, CNBC reported that the company is due to lay off 100 engineers, which amounts to ten percent of its entire engineering staff. Since Snap went public, employees have experience multiple rounds of layoffs, but this week’s announcement comes as the largest. At this point it is unclear specifically which sectors of engineers will be hit by the layoffs.
Snapchat is a business conundrum. While still widely popular with younger generations and media companies like BuzzFeed and Cosmopolitan that are trying to engage with consumers, Snapchat has fallen behind in regard to user growth rates in comparison to its main competitor, Instagram. Once the app began gaining momentum, Instagram added similar features which allow users to post ‘stories’ that last for 24 hours, consequently attracting more users to solely use Instagram given the consolidation of features. Snapchat has additionally undergone multiple design and user interface changes in the last nine months, frustrating some users and making others stop using the app entirely.
As of today, Snap Inc has not released a statement or commented about the impending layoffs.