Snap has fired 20 percent of its workforce, or about 1,280 employees, citing lower revenue growth than expected. The massive job cuts at Snap came after the company reported nearly $10 billion in quarterly losses.
The shares of Snap, the parent company of Snapchat, have nosedived nearly 80 percent since the beginning of this year. After the disastrous quarterly results were announced the stock crashed to a new 52-week low.
"The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long term future and reaccelerate our revenue growth. Overall, the size of our team will remain larger than it was at this time last year," CEO Evan Spiegel said.
Snap has a total employee strength of 6,400-strong headcount. After firing more than 1,000 staff at one go the CEO insisted that the company will have more employees at the end of the year than it had at the beginning.
Spiegel added that Snap's business restructuring focuses on three strategic priorities -- community growth, revenue growth, and augmented reality. The company will discontinue investments in Snap Originals, Minis, Games, and Pixy.
"Projects that don't directly contribute to these areas will be discontinued or receive substantially reduced investment," he said justifying the job cuts.