Snap Reportedly Plans To Lay Off 20% Of Workforce Just Weeks After CEO Closed Deal For $120M Mansion

Snap Inc SNAP, the parent company of the social media app Snapchat, plans to lay off around 20% of its workforce, The Verge reported on Tuesday. 

This report comes just weeks after Snap founder and CEO Evan Spiegel closed the deal — which was said to be in the works for nearly two years — on a $120 million mansion with his wife Miranda Kerr in Los Angeles.

The real-estate purchase is one of the most expensive houses ever bought in the state of California, behind only Amazon CEO Jeff Bezos’s $165 million Beverly Hills home and the venture capital firm Andreessen Horowitz's co-founder Marc Andreessen's $177 million Malibu home, according to the New York Post.

Snap would join other high-profile tech companies — such as Tesla Inc TSLA and Shopify Inc SHOP — that have announced layoffs in last six months, if the report is accurate. The Verge reported that the layoffs would total around 20% of Snap’s 6,400 employees, and begin Wednesday. 

According to the publication, certain departments would get hit harder than others. Snap’s hardware division, which designs its AR/VR products, would see layoffs signaling that the company may be pulling back from the space.

Snap’s stock is down more than 86% since last August, trading below $10 Tuesday afternoon. Investors would hope that the layoffs allow Snap to cut enough costs to improve earnings. 

The Verge also reported that Snap’s chief business officer, Jeremi Gorman, would be leaving to join Netflix Inc NFLX.

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