Snapchat Shuts its Web3.0 Division With 20% Layoff

Multimedia instant messaging app Snapchat is closing down its Web3.0 division in addition to its retrenchment exercise. 

Snapchat claims to be doing all of these to maintain a balance as it has already fallen short of its financial target. According to CEO Evan Spiegel, cutting down Snapchat’s workforce by almost 20% was a difficult decision that needed to be made.

Evan informed the employees of the new development on the last day of August through a note that he sent out to them. 

In his note, he said “our forward-looking revenue visibility remains limited, and our current year-over-year QTD revenue growth of 8% is well below what we were expecting earlier this year. While we will continue our work to reaccelerate revenue growth, we must ensure Snap’s long-term success in any environment.”

As a result of the reduction in revenue and as a means of avoiding more significant losses, there is a need to adjust the Snapchat cost structure. 

Part of its restructuring and rehabilitation plan is to streamline its business focus to three strategic priorities. They are community growth, revenue growth, and augmented reality. From now, any project not classified under any of these categories will be immediately discontinued or will receive a very reduced amount of investment. 

Conversely, projects which may be affected by this pullout include Snap Originals, Minis, Games, and Pixy, among other areas. Zenly and Voisey will be gradually brought to an end with this new announcement. 

The layoff exercise involving approximately 20% of the employees will cut across all the Snapchat teams. Meanwhile, preference will be given to key teams that are instrumental to the actualization of the new streamlined three strategic priorities.

More Job Losses Hits The Crypto Industry

In his statement, Evan believes that the positive results which the layoff will produce should be enough to sustain the company and therefore avoid a repetition of such incidents in the future. 

Even with the layoff, the size of the Snapchat team will still be larger than it was in 2021. 

Similarly, trading platform Robinhood has also laid off 23% of its workforce due to crypto winter which led to a bearish market. This was shortly after it sent 9% of them away in April. The same is the case for OpenSea, a non-fungible token (NFT) marketplace. OpenSea announced via Twitter after sending employees a note, that it would cut down its workforce by 20%.