Snap is tightening its belt and seems to be bringing down expenses on projects that do not have an assured future. Apart from laying off a fifth of its workforce, Snap will also shutter “Yellow”, its startup accelerator program.
As we just reported, Snap is laying off 20% of its staff. Snap Inc. CEO Evan Spiegel sent a memo on Wednesday, confirming the company wants to boost its revenue while limiting its expenses “to generate free cash flow even in a low growth scenario”. The company is planning to put its efforts behind Augmented Reality projects.
As part of the cost-cutting drive, any “projects that don’t directly contribute to these areas will be discontinued or receive substantially reduced investment”. Although the lay-offs were confirmed, it wasn’t clear what Spiegel meant when he made the statement about terminating or reducing funding of projects.
It is now clear that Snap will shutter Yellow, its startup accelerator program. The company launched Yellow in 2018. Since then, Snap has welcomed five batches of startup founders. In April this year, Snap welcomed its fifth group, which consisted of eight startups.
Through Yellow, Snap has offered a $150,000 financial infusion, along with mentorship from industry executives and startup vets. Yellow had been accepting applicants for its fall 2022 group. The platform stopped the application process on July 29. Confirming the closure of the accelerator program, a Snap spokesperson said:
Snap 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.
Nearly every industry has been tweaking its strategy to wade through uncertain times that lie ahead. Several tech giants have already confirmed they would either slow down their hiring or lay off employees.
Via: Business Insider
