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The CEO of Snap Inc, Evan Spiegel, has announced that the company is reducing its workforce by around 20%. Additionally, the company will shut down its Web3 division as part of its restructuring plan as it fails to meet its financial targets.
Snapchat’s parent company shuts down its Web3 division
The note published by Speigel on Friday said that the company’s layoff plans are part of the company’s plan to adjust to the slow revenue growth witnessed in recent months. The company has also witnessed a stock price decline and failed to meet its financial targets.
Spiegel said it was falling behind its financial targets, adding that the current year-over-year QTD revenue growth was significantly below what the company had expected at the beginning of the year.
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Snap Inc is now planning to restructure because it failed to meet its financial targets. The restructuring is being done to ensure that the firm will succeed in an area filled with intense competition from other companies such as Instagram and TikTok. The two platforms are currently dominating the social media spaces.
One of the things the company is doing as part of the restructuring is shutting down the Web3 division and letting go of the entire team. The head of the Web3 team at Snap, Jake Sheinman, announced that he was leaving the company in several posts on Twitter. Sheinman admitted that shutting down the Web3 team was part of the company’s restructuring.
Snap Inc’s restructuring plan
Spiegel said that the restructuring would focus on three main priorities: community growth, revenue growth, and augmented reality (AR). The current projects that do not fall within these three areas would be disbanded, or their budgets would be reduced.
One of the areas that Snap will not focus on is the buzzing Web3 and metaverse areas. These are areas that its core competitor, Meta, has heavily invested in. several; tech companies have shown increased interest in Web3 as it is believed to be the next phase of the evolution of the internet. However, Snap is not looking to position itself in the Web3 or blockchain industry.
This year has seen several tech companies fail to meet their financial goals. Several firms such as Apple, Coinbase, Google, LinkedIn, Meta, and Netflix have trimmed their workforce because of the rising interest rates because of rising inflation levels in the economy.
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