Snap Announces Layoffs Affecting 1,300 Employees, Puts Gaming Division on Hold

In a major restructuring effort, Snapchat's parent company Snap has laid off approximately 20% of its workforce, totaling around 1,300 employees, as part of a broader plan to reduce costs and prioritize investments. This move has resulted in the company's gaming business being put on hold, with games and mini-apps being shifted into maintenance mode with significantly reduced investment. According to a memo to investors, Snap is refocusing its strategy around three key areas: community growth, revenue growth, and augmented reality, and will discontinue or reduce investment in projects that do not directly contribute to these priorities. The layoffs have also led to the cancellation of most original Snapchat shows, with the company opting to focus on content created by partners and creators instead. Additionally, Snap is scaling back its investment in its Spectacles product and has halted development of its Pixy drone camera. The restructuring is expected to save the company around $500 million, including a $450 million reduction in adjusted operating expenses and a $50 million decrease in fixed content costs. In a letter to staff, Snap CEO Evan Spiegel cited the company's lower revenue growth rate as the reason for the cost-cutting measures, stating that they are necessary to avoid significant ongoing losses. The move marks a significant shift for Snap, which launched its dedicated gaming business, Snap Games, in 2019 with the goal of creating a gaming platform for users and developers.