Snapchat’s parent company closes Web3 unit amid layoffs

Snap Inc. CEO Evan Spiegel announced in a memo on Friday that the company has made the tough decision to cut the size of its workforce by 20 percent.

The note said this round of layoffs comes as the company faces sluggish revenue growth, a slumping stock price and overall lagging behind its financial targets. Speigel shared:

“Our forward-looking earnings visibility is limited, and now year-over-year QTD earnings growth of 8% is below our expectations earlier this year.”

Snap Inc. In a highly competitive space dominated by Instagram and Tik Tok, the company will undergo a major restructuring effort to ensure its success. As part of its restructuring process, the company liquidated its entire Web3 team. Jake Shinman, head of Snap’s Web3 team, announced his departure from the company Wednesday in a series of posts on Twitter.

“Due to company restructuring, decisions have been made to sunset our Web 3 team.”

According to CEO Spiegel, the restructuring is part of an effort to focus on three strategic priorities. namely community development, revenue growth and augmented reality (AR). Projects that do not conform to these areas will be terminated or have their budgets significantly reduced.

Right now, Snap seems to be de-prioritizing the burgeoning Web3 and Metaverse space in the face of competition like Meta. Although many tech innovators seem to share the opinion that Web3 will be the next iteration of the Internet, Snap doesn’t seem interested in positioning itself in the blockchain industry.

Snap’s layoffs come as tech companies like Coinbase, LinkedIn, Meta, Apple, Google and Netflix have had to cut their workforces due to rising interest rates in an inflationary economy.