All is not well at Snap Inc. The Verge reports that the company’s top executives are leaving to join Netflix as it gets ready to lay off 20% of its staff.
Snap’s Chief Business Officer Jeremi Gorman and Vice President of Ad Sales for the Americas, Peter Naylor are going to join Netflix to look over its cheaper ad-supported tier. The company’s spokesperson confirmed their departure and Netflix confirmed that Gorman will be the company’s President of Worldwide Advertising and Naylor will lead the company ad sales organization.
“Jeremi’s deep experience in running ad businesses and Peter’s background in leading ad sales teams together will be key as we expand membership options for consumers through a new ad-supported offering.”
Snap’s former top executives are departing at a time when the company is planning to restructure its ads team and lay off 20% of its 6,400 employees.
Snap Inc. to terminate staff from hardware, mini-games, and other departments
According to the report, the social media company will be making cuts in various departments starting this week. And its hardware division responsible for AR Spectacles glass and Pixy camera drone, Snap-mini games, and mapping sectors will face the hardest hit.
The company’s plummeted stock price and its aggressive hiring during the COVID-19 pandemic are among the reasons for the significant number of layoffs.
Snap’s stock price has lost nearly 80 percent of its value since the beginning of this year, and the company said in May that it would slow hiring and look for ways to cut costs.
Like its other tech peers, Snap hired aggressively during the pandemic. It entered March of 2020 with roughly 3,427 full-time employees and ended last quarter with 6,446, a 38 percent increase from the same time last year.
The report also mentions that the COVID-19 pandemic and the iOS App Tracking Transparency feature have severely affected its business.
Recently, the company launched a Snapchat+ paid tier with exclusive features for $3.99 per month. The service has already crossed the 1 million subscribers mark.