New Delhi

Social media giant Snap, the parent company of Snapchat, disclosed on Monday its decision to lay off approximately 528 employees, constituting 10 per cent of its global workforce.

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This is based on a Reuters report.

Snap's struggle to translate its popularity among young users into consistent revenue growth and compete with industry giants like Meta Platforms has prompted this restructuring effort.

The announcement comes in the wake of similar actions by tech and media firms, reflecting a broader challenge faced by the industry.

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Jasmine Enberg, Principal Analyst at research firm Insider Intelligence, commented on the layoffs, expressing concerns about the state of Snap's business.

"The layoffs don’t bode well for the state of Snap’s business. Snap is likely trying to garner some goodwill with investors, who rewarded its competitor for its cost-cutting measures," Reuters quoted her as saying.

The tech industry has witnessed a series of layoffs, and Snap's decision to streamline its workforce is seen as an attempt to align with market expectations and address challenges in achieving sustained growth.

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Snap is set to report its fourth-quarter results on Tuesday.

The company outlined expectations of pre-tax charges in the range of $55 million to $75 million, primarily covering severance and related costs, with a significant portion expected to be incurred during the first quarter of 2024.

The restructuring aims to ensure the capacity for incremental investments supporting future growth.

A person familiar with the matter noted that remote workers are disproportionately affected by Snap's workforce reduction, highlighting the company's push for employees to return to the office for four days a week.

The layoffs at Snap contribute to the overall tech industry trend, with almost 32,000 workers being let go from 122 tech companies since the beginning of the year.

The sector witnessed 168,032 job cuts in 2023, accounting for the highest number of layoffs across industries, according to a report by Challenger, Gray and Christmas.

(With inputs from Reuters)