Here Are the Snap Products And Teams Facing the Steepest Cuts
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
It’s a dark day at Santa Monica-based Snap. The firm slashed 20% of its staff Wednesday in an effort to save the company $500 million. The layoffs are expected to affect more than 1,200 employees, but some departments will be hit harder than others.
CEO Evan Spiegel outlined a restructuring plan on Wednesday that will require Snap to abandon its ambitions to expand beyond its core businesses—at least for now. The social media giant will instead focus on growing its user base and revenue, as well as its long-term vision for augmented reality.
That means a lot of other plans are being put on ice. From drones to video games, here are the parts of Snap’s business facing steep cuts:
Pixy, We Hardly Knew Ye
Just four months ago, Snap surprised many observers when it unveiled Pixy, a pocket-sized drone that let people take selfies from an aerial view. Although Snap likes to call itself a “camera company,” the firm doesn’t often make hardware with actual cameras, save for its AR glasses.
Pixy was a neat item that received a lot of positive press, but it was beset by long delivery delays after Snap failed to manufacture enough drones. Now, Pixy has crash landed just after taking flight. Snap will “discontinue further development” of the flying camera, the company wrote in a presentation to investors released Wednesday.
Pixy isn’t the only hardware affected by Snap’s reshuffling. A company spokesperson said Snap remains “fully committed to Spectacles,” the smart glasses that are only available for select AR developers. But the firm is “narrowing our investment scope” in Spectacles to “focus on highly differentiated long-term research and development,” the company told investors.
A Programming Note
Like seemingly every major media platform lately, Snap has tried producing original programming. The company-funded “Snap Originals” included shows from the likes of the D’Amelio family and gymnast Simone Biles. The series were available on the Snapchat app.
Snap is now scrapping much of its content production, aiming to save $50 million in related costs. The company will continue to host content created by partners and creators, including shows backed by ESPN and NBC. “Good Luck America,” a Snap Original about U.S. politics, will continue, according to The Hollywood Reporter.
Playing No Games
Spiegel has aspirations to turn Snap into a “super app,” a platform that goes well beyond messaging and sharing photos. A good comparison is China’s WeChat, which facilitates digital payments and ecommerce features in addition to social media.
One way Snap aimed to do this was by letting outside developers make “mini” apps and games. Launched in 2020, Minis were a suite of third-party utilities that let Snapchat users buy movie tickets or create a deck of flashcards, through tools integrated in the app’s Chat feature. For example, HBO Max launched a Mini for Snapchatters to tune into free episodes of shows.
Snap also encouraged developers to launch mobile games on Snapchat. In April, the company said more than 300 million people played Snap Games, and more than one third of the firm's gaming partners generated over $1 million in revenue.
But the team overseeing Minis and Games appears to have been severely diminished by Snap’s cutbacks. The company said those areas will see “substantially reduced investment” in its note to investors.
In addition, Snap intends to wind down social map app Zenly and music app Voisey, which were standalone products. Instead, the company will focus on Snap Map and Sounds features within Snapchat.
Deceleration
Also on the chopping block, for now, is Snap’s Yellow accelerator program, which invested in and mentored startup founders. Mike Su, tYellow’s director, sent an email Wednesday announcing the program was sunsetting “as part of an overall effort to increase focus at Snap.”
A Snap spokesperson confirmed that the company will not bring on a fall 2022 class and will pause Yellow’s program operations.
“We are proud of the success our Yellow alumni have achieved, and we thank all the founders who applied to this fall’s accelerator for their time,” the spokesperson said.
Disclaimer: Snap is an investor in dot.LA
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
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