Snap is canceling several projects and laying off 20 percent of employees

From The Verge: Snap is laying off around 20 percent of its more than 6,400 employees and canceling its original shows, in-app games, and several other projects as part of a corporate restructuring.

In a company memo on Wednesday that you can read in full below, CEO Evan Spiegel wrote that Snap is “restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality.”

Spiegel said the company’s revenue growth had reaccelerated to 8 percent from being flat in late July, suggesting its ads business is starting to rebound. Still, that is a far cry from the more than 40 percent revenue growth Snap was seeing before Russia invaded Ukraine, which it blamed for a slowdown in marketing spend, and the digital ads market started to contract earlier this year. In a filing with the SEC, Snap said it expects the layoffs, which were first reported by The Verge on Tuesday, to save it $500 million in costs annually.

“Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses,” Spiegel wrote in the memo. “While we have built substantial capital reserves, and have made extensive efforts to avoid reductions in the size of our team by reducing spend in other areas, we must now face the consequences of our lower revenue growth and adapt to the market environment.”

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