Snapchat owner Snap Inc. has confirmed it plans to lay off roughly 20 percent of its workforce and stop investing in video games. The news comes with year-on-year revenue growth at the company falling "well below" expectations.
As spotted by Engadget and confirmed in a memo sent to investors, Snap said it will reduce its global headcount by approximately 20 percent so it can refocus on top priorities and "drive towards profitability."
Elaborating further, Snap indicated its three strategic priorities moving forward will be "community growth, revenue growth, and augmented reality," noting that projects that don't "directly contribute" to those areas will receive less funding or be discontinued entirely.
That means the company's video game plans are being shelved indefinitely, with the decision coming around three years after Snap launched its game platform in partnership with developers like Zynga and Spry Fox.
"We have worked thoughtfully and deliberately to find the right balance between focusing our investments while continuing to innovate, and we have made the decision to discontinue our investments in Snap Originals, Minis, Games, and Pixy, among other areas," reads the memo.
Snapchat's games had reportedly reached 200 million users as of May 2021, and also boasted around 30 million monthly active users. Those figures suggested that, at the time, over 16 percent of Snapchat users were playing games on the social media platform.
Commenting further on the layoffs and discontinuation of certain projects, Snap said it was "deeply sorry" about the decision, but suggested the "extent of this reduction should substantially reduce the risk of ever having to do this again."