Snap culled 20 per cent of its entire workforce as part of a wider restructuring that will result in the company shutting down a range of projects including mobile games, a consequence of a sharp downturn in its performance.
In a statement, CEO Evan Spiegel said the company was restructuring its business to focus on three strategic priorities: community, revenue growth and augmented reality (AR).
“Projects that don’t directly contribute to these areas will be discounted or receive substantially reduced investment,” he added.
To that effect, Snap will discontinue investments in mobile games, its drone selfie play Pixy, content offering Snap Originals and wind-down standalone applications Zenly and Voisey.
In total, around 1,200 employees will lose their jobs, but Spiegel noted the size of the workforce will “remain larger than it was at this time last year”.
The sweeping changes come as revenue growth continues to slow, on the back of advertising slumps, increased competition and effects of the broader economy. The company said it was expecting an 8 per cent revenue rise year-on-year in the current quarter, its slowest growth since its IPO in 2017.
“We must now face the consequences of our lower revenue growth and adapt to the market environment,” said Spiegel.