Snapchat maker Snap laid off more employees as part of its company-wide cost-cutting efforts, The Information reported earlier this week, citing sources familiar with the move. Approximately two dozen people lost their jobs, with the majority of them being from the firm’s content division which is now understood to be consolidating many of its projects and is reportedly shutting down its New York office. Going forward, the unit will only be based in Snap’s headquarters located in Venice, Los Angeles. Snap already slowed its hiring efforts and is planning on keeping them low throughout this year, industry insiders said in late 2017.
The internal consolidation isn’t only affecting the company’s content team but also its partnerships division which will soon be absorbed by the former, according to the same report. While Snap’s Director of Partnerships Ben Schwerin will retain his title, he’s now effectively being demoted and will report to content chief Nick Bell instead of CEO Evan Spiegel. The firm’s partnership-related endeavors recently took a hit after CNN decided to kill its Snapchat show “The Update,” citing profitability concerns, i.e. the fact that it doesn’t believe it can effectively monetize the program after the social network stops subsidizing its costs and makes it entirely reliant on advertising. Snap employed just under 3,000 people as of early fall.
Following the publication of its disappointing Q3 2017 financials, Snap announced a major redesign of Snapchat that will separate the content posted by one’s friends from snaps created by publishers such as celebrities and brands, directly reducing the potential reach of its advertisers. The company said it’s expecting a short-term financial hit as a result of the move but believes the decision will benefit its users going forward. Not all industry watchers were convinced by those arguments, with some pointing out how Snap never had an issue with pleasing its users as its app still boasts engagement rates that are much higher compared to the rest of the market. Instead, critics highlighted stagnating user growth as one of the firm’s major issues, expressing skepticism about the potential of the redesign to attract more users as it still won’t make the app significantly more accessible. Snapchat is widely believed to be one of the most convoluted social media and messaging apps in the world, at least as far as globally popular services are concerned.