Home » US business news • US Employment News » Snap to cut 170 jobs in AR division
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Snap, the parent of popular messaging app Snapchat, is cutting around 170 employees.
The job cuts are linked to the discontinuation of a recently established division focused on creating augmented reality (AR) tools for business clients.
CEO Evan Spiegel informed staff of the layoffs, citing financial woes despite the platform reporting 397 million daily users last quarter.
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AR technology blends real-time camera imagery with computer-generated overlays.
Snapchat's popular face filters were among the first viral AR products.
Over the years, Snap invested significantly in AR.
It includes acquiring eyeglass-maker WaveOptics for $500 million and digital shopping startups Vertebrae and FitAnalytics in 2021.
In March, Snap launched its AR enterprise division to generate non-advertising revenue by selling AR tech for retailers to integrate into their apps and websites.
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However, the company scrapped these plans due to the substantial investment required.
Spiegel said: “Our business performance has reduced our capacity to invest in this incremental opportunity as we have had to focus our resources on our core advertising business.”
Like its competitor Meta, Snap makes most of its revenue from advertising.
The affected employees, totaling around 170, will receive severance packages, and Snap will rehire them where possible.
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The company didn’t disclose the size of the severance packages or the geographic distribution of the layoffs.
As of February, Snap had 5,288 employees, according to a filing submitted to the Securities and Exchange Commission.
In addition to financial challenges, Spiegel noted the increasing difficulty of differentiating Snap's products due to the proliferation of generative AI tools.
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He expressed his gratitude to the departing employees and acknowledged the difficulty of creating and winding down a new business.
Snap's previous layoffs were more extensive, with a 20% reduction in its workforce in August and the closure of its San Francisco office in October.
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