Snap lays off 100 people for the second time this month

One year ago this month.
One year ago this month.
Image: AP Photo/Richard Drew
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Snapchat’s parent company Snap celebrated the one-year anniversary of going public at the start of the month, but there hasn’t been much to cheer since.

The company laid off roughly 100 people—10% of its engineering department—on March 7, and today, March 29, Bloomberg reports it will lay off around another 100 people, this time from its advertising department.

The company has also contended with several celebrity power users leaving the platform. First, at the end of February, reality star Kylie Jenner said she barely used Snapchat any more (although she’s since been spotted on the app). Then, model Chrissy Teigen announced she had left the app after an ad making light of domestic violence—specifically rapper Chris Brown’s beating of singer Rihanna—and the app’s generally disliked redesign that launched late last year. Rihanna herself spoke out heavily criticizing the ad on Snapchat’s main rival app, Instagram.

In February, Snap’s shares traded above their IPO price for the first time in months, after a decent quarterly earnings report beat analysts’ expectations. They’ve since fallen back below the $17-per-share IPO price, after the celebrity backlash, unfavorable analyst outlooks, and the news of layoffs.

Bloomberg reported that today’s cuts were the result of over-staffing in the advertising department, as the company rushed to build a viable business in the run-up to its IPO. It’s also possible that approving ads making light of domestic abuse, coupled with more complete ad offerings from far-larger digital advertising rivals like Google and Facebook (which are obviously dealing with its own scandals), has made selling ads on Snapchat a tough prospect.

“Late last year we asked senior leaders across Snap to look closely at their teams to ensure they had the right resources and organizations to support their missions,” said Imran Kahn, Snap’s chief strategy officer, in a statement. “While this process has required us to make some really tough decisions, we believe that rigorously ensuring our team structure always aligns with our goals will make us stronger.”

Snap employed 3,069 people as of Dec. 31, 2017. Over the past three years, it has lost a cumulative $4.3 billion.

Correction: An earlier version of this post stated Snap employs 1,800 people, when in fact it employed 3,069 before this month’s layoffs.