As the advertising sector is being decimated by high inflation and a faltering economy, Snap Inc. announced on Wednesday that it will lay off 20% of its whole workforce and discontinue initiatives, including mobile games and novelties like a flying drone camera.
According to Snap, the cost savings from the changes will help the company save $500 million a year.Morning trading saw a 15% increase in Snap shares, which spread throughout the industry. Shares of Pinterest Inc. and Facebook parent company Meta Platforms Inc. both increased in value.
The company stated that it would focus on boosting sales and Snapchat users. Analysts and investors have turned to Snap as an early indicator of trends affecting competitor social media platforms because Snap is frequently the first to disclose quarterly financial reports or corporate updates.
In May, they warned investors that it will miss its revenue goals due to the worsening state of the economy, which sparked a sell-off in social media stocks.shares of the Santa Monica, California-based company
The Verge was the first to expose plans for layoffs, while AdAge was the second to announce two top advertising execs had left the company.
