Layoffs to save $34 million annually: Snap Inc
Snap Inc., the parent company of Snapchat, has said that its recent layoffs of about 220 employees will save it $34 million per year in salaries and taxes, as well as a one-time benefit of $31 million related to stock-based comp forfeitures.
The company made the disclosure in a securities and exchange commission filing, technology website Variety reported late on Saturday.
Earlier in the week, Snap confirmed that it laid off about 100 employees, with the cuts mostly affecting its sales team.
This third round of layoffs came after Snap cut the jobs of a couple dozen employees across its hardware and recruiting divisions in 2017. This was followed by two dozen more cuts in January.
During the same time, Snap instituted a company-wide system for evaluating employee performance and CEO Evan Spiegel then told managers that "they would be required to make 'hard decisions' about evaluating their teams going into the 2018 calendar year", Tech website Cheddar reported.
Snap slowed its hiring rate by nearly 60 per cent last quarter and reported having 3,069 employees at the end of 2017.
"The reduction in force is to align resources around our top strategic priorities and to reflect structural changes in our business," the company said in the filing.
Snap also revealed that it expects to lose $25 million to $45 million because of ending lease obligations for offices in Southern California to centralise its corporate headquarters in Santa Monica, California.
Those charges would be incurred primarily in the second and third quarters of 2018 "based on current exit plans".
Snap has also leased 300,000 square feet of office space in Santa Monica and has listed 14 of its Venice Beach locations -- totalling 163,000 square feet -- for sublease, Variety cited property news portal CoStar News as saying.
It has also leased 79,000 square feet of office space at the Santa Monica Airport
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