The news: Snap is laying off 20% of its staff of more than 6,400 employees in response to weak Q2 earnings and an 80% decline in its stock price, per Insider. The move is a setback for augmented reality (AR) products and services.
Snap’s lean period: Snap’s layoffs are a precursor to a wider restructuring plan. CEO Evan Spiegel indicated in May that the company would cut back on recruiting and “find significant cost reductions.”
The problem: While Snap’s losses are reflective of slowing ad sales—the net effect of Apple’s privacy restrictions—the general economic downturn will continue to bear down on the tech sector.
The big takeaway: Snap, the industry leader in AR, now has to trade its future aspirations to weather its present tribulations. This will slow down overall AR advancement and adoption while leaving the door open for competitors to snap up AR talent.