Tech sector contracts further as layoffs continue into 2024
SANTA MONICA, CALIFORNIA - APRIL 19: Evan Spiegel, CEO of Snap this week announced a 10% reduction in its global workforce, impacting more than 500 workers (Photo by Joe Scarnici/Getty Images for Snap, Inc.)
The pace of the global tech fallout shows little signs of slowing with the post-pandemic demand slump of last year looking to continue into 2024.
Job cuts among giants PayPal and Snap are the latest to hit the contracting industry, with more than 33,000 workers within the sector let go so far in 2024, according to tech tracking firm, layoffs.fyi.
Latest figures from the employment tracker also show that more than 130 tech firms have already cut staff in 2024, following layoffs across almost 1,200 firms throughout 2023 which impacted more than 260,000 tech workers.
Earlier this week, the parent company of social media giant, Snapchat announced that it would be cutting more than 500 jobs from its global operations, representing around 10% of its total workforce.
Days later, the firm posted disappointing revenue in the fourth quarter, missing analysts' projections of $1.38bn (€1.28bn), with revenue rising just 5% to $1.36bn (€1.26bn). For the full year, Snap said conditions reflected a "challenging operating environment," with revenue growth remaining flat over the period.
Speaking this week, the company said the job cuts were necessary to "invest incrementally" in its growth over time.
Despite its recent round of layoffs, Snap projected a loss in adjusted earnings of $55m-$95m (€51m-€88m), far exceeding a loss of $33m (€31m) forecasted by analysts.
Snapchat also reported 414 million daily active users in the fourth quarter, up 10% from the same period last year. Almost half of those are in established markets like North America and Europe — regions the company says it will now prioritise. The media giant added that it has more than 800 million people using the app globally every month.
“We are shifting more of our focus toward user growth and deepening engagement in our most highly monetizable geographies,” said Snap chief executive, Evan Spiegel in a letter to shareholders.
“Focusing on these initiatives will help us increase daily active usage of Snapchat, deepen content engagement, improve performance for advertisers, and ultimately accelerate revenue growth and drive increased free cash flow.”
The company added that it will incur costs between $55m and $75m (€51m-€70m) related to layoffs, the majority of which will be spent in the first quarter.
Snap joins the running list of firms to cut jobs in recent months as the tech sector grapples with a prolonged slump in post-pandemic demand. In January, Microsoft announced that it would be cutting 1,900 jobs across its gaming divisions, resulting in job cuts in its Activision and Blizzard offices across Cork and Dublin.
Just last week, payments giant, PayPal said it would be cutting more than 200 jobs from its Irish workforce as part of a "strategic transformation" to position them for further growth.
