Snapchat’s 120 engineer layoffs are a symptom of the platform’s wider issues

When Snapchat decided to lay off 120 of its engineers last week, Socialbakers' Yuval Ben-Itzhak wondered if the social media platform could ever hope to live up to its 'innovative' label without them

It’s never a good sign when a technology company lays off engineers. The recent news that Snapchat is laying off 120 of them – reportedly 10% of its engineering workforce – does not bode well.

It adds further speculation to Snapchat’s reliability as a tool for marketers as it tries to measure up against its rivals.

Snapchat has encountered some troubling times over the past few months, with people questioning whether the platform can ever size up to its competitor, Instagram, and bring business value to marketers.

Over the past year, Instagram has rapidly expanded its user base. In September 2017, the platform’s audience size reached 800 million active users, a 100 million increase from April 2017, dwarfing Snapchat’s 187 million. Facebook has the advantage of its existing audience, and the cross-channel into Instagram.

A Socialbakers study asked the leading brands which was the most important platform for their business in 2018. Unsurprisingly, Facebook and Instagram topped the list, while Snapchat was left long behind. These results highlight significant challenges faced by Snapchat, as it’s still not seen as a platform of choice for marketers.

So how did we get here? Take the announcement at the end of 2017 that it was redesigning the app for greater personalisation. This was a step in the right direction for the company, or so we thought.

As the update rolled out, a petition of over 1.25 million signatures retaliated rather quickly, calling for the app to revert back to its old interface.

If that wasn’t enough, Kylie Jenner added fuel to the fire in what is probably the most costly tweet to ever be published, ridiculing the update and reportedly knocking $1.7 billion from the company’s worth. Snapchat can’t afford to lose influencers like Jenner.

What’s even more troubling for Snapchat is that its cost and metrics are currently a drawback for marketers looking at investing budget. According to research by Buffer, Instagram ads often cost less than Snapchat ads and Instagram offers better viewability metrics.

Currently, for marketers to have a programmatic access (APIs) to Snapchat requires special permission, which only a few brands have. This creates an instant barrier for marketers to leverage the platform and learn about their audiences and better create and target content. To remain competitive, Snapchat needs to take down this barrier.

Recent rumours of an acquisition by Apple doesn’t sound so far-fetched, since Tim Cook stated that augmented reality (AR) is the way forward. Fortunately for Snapchat, it’s currently leading the way here, recently announcing that it will feature creator-made AR lenses in the app’s carousel. However, it remains to be seen if the reduction in engineers could have an impact on an acquisition of the platform. This is also coming at a time when the CEO sold US$50 million in stock, which may not help investors believe Snapchat’s situation will improve.

Rather sensibly, Snapchat has now begun the roll-out of a tagging feature, enabling users to @ their friends within their stories, though this is in testing phase and not yet available to everyone. This has taken the company some time considering it was implemented by Instagram in 2016, not long after the platform trumped Snapchat’s stories feature with one of its own.

It’s clear that Snapchat has its work cut out for it and it’s going to be interesting to see how it chooses to progress in 2018. In order to remain competitive Snapchat will need to focus on staying innovative to keep on exciting its users, focus on quality content to keep engagement levels high and develop its ad-tech stack to give marketers more options on the platform.

One thing is for sure, for Snapchat the next 12 months will be pivotal in deciding its future as it squares up to its Menlo Park competitors.

Yuval Ben-Itzhak is CEO of Socialbakers


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing