Snap Inc. (SNAP), the struggling maker of the disappearing messaging app Snapchat, is gearing up for its third and largest round of job cuts with the company’s engineers on the chopping block this time around.
Citing people close to the company, The Wall Street Journal reported Snap plans to fire around 10% of the engineers at the social media company, marking its largest round of job reductions since it went public in March of last year. The company has around 3,000 employees. It has already let go of employees in its Spectacles and recruiting units, noted the Journal. At the same time that Snap is laying off engineers, people close to the company told the paper it needs to bring in more senior level talent. The company has brought on around 2,400 workers since the start of 2016, with it adding roughly 300 a month. While reporting fourth quarter earnings in February, Snap’s Chief Executive Evan Spiegel said the messaging company plans to rein in some of that hiring, noted the Journal. (See more: Why Worst Is Far From Over for Snap's Stock.)
Cheddar, the video news website, was the first to report the layoffs, citing people familiar with the matter who said the job reduction announcement could come within a week. All told, around 100 engineers could lose their jobs as a result, reported Cheddar.
The move comes as Snap has been struggling to grow its user base and thus advertising income. After failing to do so for most of last year, the company was able to impress in the fourth quarter, handily beating Wall Street expectations and adding 8.9 million users. For its fourth quarter, Snap reported revenue of $285.7 million, higher than the $252.9 million Wall Street was looking for, according to Thomson Reuters. The loss of $0.13 a share was narrower than the $0.16 a share loss analysts expected. The social media network operator posted 187 million daily active users in the last three months of 2017, an 18% jump year-over-year. Wall Street had expected 184.3 million daily active users.
Still, any positive benefit it got from the strong showing in the quarter of the year was dampened by a redesign of its messaging app that didn’t sit well with loyal users. Celebrity Kylie Jenner criticized the redesign in late February, which resulted in a steep sell off in the stock. (See more: Snap Shares Tank After Kylie Jenner Snubs Redesign.) A Change.org petition calling for Snapchat to revert back to its old version gained more than 1 million signatures last month.