Snap’s decision, announced Wednesday, to shrink its workforce 20% marks the biggest round of layoffs at a prominent internet ad firm so far in this downturn, at least in percentage terms. The cuts put Snap in the company of startups that went on overly optimistic hiring binges and crypto firms that got caught flat-footed by the crypto market collapse.
A review of jobs data shows that Snap grew its head count faster than the Big Tech companies during the pandemic, as the digital ad market rocketed (see above chart). Snap CEO Evan Spiegel acknowledged in a memo to employees today that Snap had invested in its business assuming a “higher rate of revenue growth” than what the company is now experiencing.
