Social media company Snap (NYSE:SNAP) shares are trending nearly 4% lower today after the Snapchat parent outlined plans to lower its global headcount by nearly 10%.
The company is undertaking this move to enhance flexibility and drive long-term growth. Consequently, Snap expects to incur pre-tax charges to the tune of $55 million to $75 million. The company expects to incur a major portion of these costs in the first quarter.
Amid rising economic uncertainty and elevated public scrutiny, multiple tech companies have resorted to layoffs to drive performance. For Snap, the announcement comes only a day before its fourth-quarter results.
Analysts expect the company to post a net loss per share of $0.17 on $1.38 billion in revenue for the quarter. In the comparable year-ago period, Snap’s EPS of -$0.18 had lagged expectations by a wide margin of $0.07. Amid rising competition for advertising dollars, the company has reported a negative bottom line for seven consecutive quarters.
What Is the Price Prediction for SNAP?
Overall, the Street has a Moderate Buy consensus rating on Snap. Following a nearly 44% jump in the company’s share price over the past year, the average SNAP price target of $17.92 points to a modest 7.3% potential upside in the stock.
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