The second quarter saw the company's growth rates drop to their lowest point in the last five years; as a result, the company has decided to let go of one fifth of its workforce.
In an effort to decrease expenses in light of the company's significantly slowed growth, Snap (SNAP) has decided to terminate its Web3 team.
In a tweet published on Thursday, co-founder of Snap's Web3 team Jake Sheinman announced his retirement from the firm. In the tweet, he also revealed the plans that the social media behemoth has in store.
According to what was written in the tweet, “As a result of the company restructure, decisions were made to sunset our [W]eb3 team”.
The request for comment that CoinDesk sent to Sheinman was not immediately met with a response.
After the firm reported its earnings for the second quarter in July, Snap CEO Evan Spiegel disclosed that the company's executives were concerned about the company's underperformance.
“Our financial results for Q2 do not reflect the scale of our ambition,” the company acknowledged in a note to investors. “We are not satisfied with the results we are delivering.”
Snap's second quarter revenue of $1.11 billion, while up 13% from the same quarter last year, came in well below the company's previous guidance of 20% to 25% and was below analyst estimates.
Despite this, Snap's revenue was up 13% from the same quarter last year.
A number of weeks after initially disclosing the data, Spiegel revealed on Wednesday that Snap will be eliminating 20% of its personnel.
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Spiegel wrote, “The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long-term future and reaccelerate our revenue growth,”.
It is anticipated that the layoffs will have a particularly negative impact on Snap's augmented reality (AR) Spectacles team, putting an abrupt end to the company's honeymoon phase with AR.
In 2016, three years after the firm first introduced Lenses, its own augmented reality (AR) filters, Snapchat began selling augmented reality (AR) eyewear called Spectacles.
The company made its greatest acquisition in 2021 when it paid more than $500 million to purchase WaveOptics, the company that supplies the augmented reality displays that are utilized in Snap's Spectacles. This transaction took place in the previous year.
Even as recently as July, the company had planned to conduct research on a feature that would make it possible for users to import NFTs into Snapchat and use them as augmented reality filters; however, it is currently unknown whether or not this initiative will proceed in light of the impending layoffs.