Snap is on a layoff spree as it seeks to rein in expenses
Snapchat’s parent company Snap (SNAP) has been laying off employees recently to curb rising expenses. The company laid off 120 employees from its engineering group in March after handing pink slips to 22 employees from its content and other division earlier this year. Snap’s net loss almost doubled YoY to $350 million in 4Q17.
According to Bloomberg, the company is now laying off 100 more employees, or roughly 3% of its workforce, which will mostly affect the company’s sales staff. Snap had a little over 3,000 employees as of the end of 4Q17. These cuts come after a period of brisk hiring.
Why Snap’s stock has been volatile
The company has faced a few issues this year including user revolt on the major redesign of the app. The company’s stock crashed after celebrities like Kylie Jenner said publicly that they do not like the new design. Pop singer Rihanna objected to an ad posted on the platform.
That said, there are a few things going in the company’s favor. The company surprised investors with its 4Q17 earnings, which lifted the stock up in February. A report by eMarketer suggests that Snap’s ad revenue would surge this year, which could lead to an increase in its market share in US ad dollars. Also, Snapchat could be one of the beneficiaries of the recent Facebook (FB) controversy.