Snap employees are expecting layoffs in the coming weeks after their questions about what may be in the works were dodged in a recent internal meeting.
Jerry Hunter, Snap's head of engineering, was asked during a recent Q&A call with workers whether the company is considering job cuts as it "reprioritizes" and "recalibrates" its business. His answer was for employees to wait and see what happens as the reprioritization will take several weeks, according to two people present. These people asked not to be identified discussing sensitive topics.
The call, and other actions taken recently by Snap, have left employees feeling that layoffs are not a matter of if, but when and how many people will be affected, the two sources told Insider. Earlier this week, The Verge reported that Snap is in the "early stages" of planning for layoffs. A Snap spokesperson declined to comment.
Snap workers started to grow concerned about the potential for layoffs after the company's disappointing second quarter results last month. Even after the company in late May imposed a hiring slowdown and told investors its outlook had worsened, CEO Evan Spiegel said the quarter "proved more challenging than expected." Advertisers, key to Snap's business, continued to pull back amid economic uncertainty.
Spiegel said in a letter to investors that "a strict reprioritization of goals and initiatives" was coming "across the company." He did not speak on a call with analysts and the company did not provide an outlook for the third quarter, citing the "uncertainties" at play. It's stock has fallen 86% over the past year.
"We expect to emerge from this recalibration as a more focused and more productive organization that is well positioned to capture the long-term growth opportunity we see ahead," Spiegel added in the letter.
Now, workers are waiting to see if they find themselves on a team or portion of the business that is being deprioritized. A period of performance reviews recently wrapped, one worker told Insider. Managers received a "recommendation" before the process started that at least 10% of their teams should be put on performance plans. A performance improvement plan, or PIP, is when a worker is identified for underperformance and put on a plan to improve their work. Employees often view it as a precursor to losing their job.
However, it's the business reprioritization that could lead to staffing changes, a source said. Performance reviews and PIPs are not part of the process, this person added. Exactly what areas of the company will be affected is not known yet, but the reorganization is in the works, one employee said, so it's currently unclear the number of people who will be impacted.
Snap now employs more than 6,100 people, an increase of 52% in a year. Like nearly every other company in the tech sector, it aggressively hired 2021 as the pandemic kept people home and using more online sites, services and tools. Thought by many executives and onlookers to be a permanent acceleration of online adoption trends, the increased demand has waned along with the pandemic. Coupled with inflation and the continued invasion of Ukraine, companies from Big Tech to startups have started to reduce costs, many through layoffs.
Are you a Snap employee or someone with insight to share? Contact Kali Hays at khays@insider.com, on secure messaging app Signal at 949-280-0267, or through Twitter DM at @hayskali. Reach out using a non-work device.
