Snap Token Creator Announces 10% Workforce Cut Amid Tech Market Weakness
Creator of the SNAP token, company Snap on Monday said that it will be laying off around 10% of its staff. According to a report by Reuters, Snap is currently in the process of laying off around 528 workers, joining other peers in the tech and financial sector who also announced workforce reduction.
Snap to cut jobs to invest better in the future
Snap announced on Monday that it would fire off 528 workers, or 10% of its global staff. According to a Reuters report, the Snapchat parent has long had trouble competing with bigger rivals like Facebook owner Meta Platforms, which announced its first dividend on Thursday following employee layoffs last year, and converting its appeal with younger users into steady revenue growth.
The company’s layoff comes as it focuses on “best positioning its business and to ensure it can invest incrementally to support growth over time”.
Snap is also anticipating pre-tax charges to be between $55 million and $75 million, mostly from severance and associated costs, as well as other charges, of which $45 million to $55 million are anticipated to come from future cash outlays. It is anticipated that the majority of these expenses will be expended in 2024’s first quarter.
Global layoffs continue as economic uncertainty looms
Snap’s decision to reduce its workforce is in tandem with other global players. Big Tech giants including Alphabet and Amazon had declared layoffs in January. Even the financial sector has been grappling with similar issues with Deutsche Bank announcing job cuts last week. Following the same suit, banking giant Citi had also announced that they are going to reduce around 20,000 of their workforce. The layoffs for both banks came after they had posted disappointing earnings for the quarter. Previously, investment banking behemoth BlackRock Inc. also announced that it would lay off 3% of its workers.
Even crypto and Web3 firms have braced for the impact of the same uncertainty. An example of this is Polygon Labs’ decision to cut roughly 19% of jobs. However, the company clarified that the reduction in workforce was not due to financial reasons but to enhance performance.
SNAP token current price and outlook
Despite the negative news, the SNAP token is currently trading up, as compared to the previous day. At the time of writing, it was trading at $0.0004319 a piece, being up nearly 164% in the last 24 hours.
The most recent long-term prediction by coin price forecast states that Snap’s price would reach $45 by the end of 2024 and $50 by the end of 2025. In 2026, Snap will reach $60 with an expectation of hitting the $110 mark by 2034, subject to a continued upward trend.