Snap Inc., which was offered tax incentives in 2017 to create jobs in Utah, said it will start laying off staff, the Verge reported Monday.
The company, which operates the social media app Snapchat, claims to have 347 million daily users on the platform. It accepted a 2017 contract with the Governor’s Office of Economic Opportunity to create 50 jobs over 15 years by opening a Utah office in order to earn up to $2.5 million in state tax rebates.
The company — which had some 5,600 employees in 2021, according to Macrotrends, and has up to about 7,700 current employees, according to LinkedIn — had a revenue of $1.1 billion in the second quarter of this year, but a net loss of $422 million. That worsened from more than $151 million in losses in the same quarter of 2021, according to documents filed with the Securities and Exchange Commission.
The company’s share value has also fallen from about $75 one year ago to between $10 and $11 this week.
According to a transcript of a July 21 earnings call, Snap’s chief financial officer Derek Anderson said that the company’s revenue growth has “slowed considerably” and in response “we intend to substantially slow our rate of hiring to effectively pause growth in our headcount.”
However, the company said in a recent statement that it would open a new office in Doha, Qatar.
A spokesperson for the company declined to comment on how many workers would be laid off and how the layoffs may affect Utah employees. The last time the company laid off staff was in 2018, when the Verge reported that it cut about 120 engineers.
Leto Sapunar is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.