Snap, parent company of Snapchat, said its recent layoffs of about 220 staffers will save it $34 million per year in salaries and taxes, as well as a one-time benefit of $31 million related to stock-based comp forfeitures.
The company made the disclosure Friday in an SEC filing. This week Snap confirmed that it laid off about 100 employees, with the cuts mostly affecting its sales team, after letting go 120 personnel in its engineering group earlier this month.
Snap had 3,069 employees as of the end of 2017. “The reduction in force is to align resources around our top strategic priorities and to reflect structural changes in our business,” the company said in the filing.
In addition, Snap revealed in the 8-K filing that expects to lose $25 million to $45 million because of ending lease obligations for offices in Southern California to centralize its corporate headquarters in Santa Monica, Calif. Those charges will be incurred primarily in the Q2 and Q3 of 2018 “based on current exit plans.”
Snap has leased 300,000 square feet of office space in Santa Monica and has listed 14 of its Venice Beach locations — totaling 163,000 square feet — for sublease, CoStar News reported last month. It also has leased 79,000 square feet of office space at the Santa Monica Airport.
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In 2018, the layoffs will save approximately $25 million — and $34 million on an annualized basis — related to salaries and payroll taxes, according to Snap.
Snap estimates $10 million in costs for severance payments to the pink-slipped workers, as well as a stock-based compensation forfeiture benefit of approximately $31 million. Those will be recognized in the first quarter of 2018.