Snapchat parent company Snap faces another weak quarter, as the company’s share price dipped below its IPO from earlier this year.
Snap, in a recent statement to CNBC, said that it recently laid off 18 people in recruiting. These cuts follow about a dozen layoffs in Snap’s hardware marketing division last month. The company also plans to slow hiring next year in an attempt to reduce expenditures.
These layoffs account for less than 1 percent of Snap’s total workforce. A company spokesperson said that the slowdown in hiring was “logical” given how fast the company has grown. Snap expanded from 600 employees at the end of 2015 to 2,600 last quarter. When asked whether there would be more layoffs in the months to come, the company chose not to comment.
Following this news, Snap’s share prices rose 2.1 percent, closing at $15.56 on Friday afternoon. The company’s IPO was set at $17 earlier this year in March.
According to Business Insider, CEO of Snap Evan Spiegel emailed the staff in September that the company will employ at a “slower rate” next year, and that supervisors will be required to make “hard decisions” about workers who are not doing well.
Neither the company spokesperson, nor any executives made any comment as to how the company aims to become profitable. The company’s investors are now worried whether the company will ever be profitable, given its recent slow growth and competitors, such as Instagram and Facebook, offering similar functions.