According to a pair of new reports from Cheddar and The Information, Snap has recently laid off roughly two dozen employees. The layoffs come as the company looks to be more cost-effective amid stagnant user growth and revenue struggles…

The reports say that the majority of the layoffs are from Snapchat’s content division, which is said to be consolidating its team to the company’s Venice, California headquarters. Previously, the content division was spread across both Venice and New York.

The content team at Snap is responsible for overseeing the production of content from major publishers, as well as Snapchats submitted by users for the public stories. In wake of the layoffs, Snap CEO Evan Spiegel sent a company-wide email explaining the importance of a business that “scales internally.” Cheddar obtained a copy of this memo, which reads in part:

“Having a scalable business model isn’t enough,” Spiegel said in the memo, a copy of which was obtained by Cheddar. “We also need to have an organization that scales internally. This means that we must become exponentially more productive as we add additional resources and team members.”

Furthermore, Snap is said to be slowing its hiring all around. In October, the company laid off some 18 recruiters ahead of a much slower hiring season in 2018. Instead of hiring so many employees, Spiegel says Snap will better utilize the employees it already has by investing “in developing and promoting leaders at Snap.

Spigel’s memo also explains that Snap doesn’t exist “to win 2nd place.” Despite the slowing growth and increased competition from the likes of Instagram, Spiegel says Snap will continue to “out-innovate competitors” with fewer resources and do it more quickly:

“Lastly, I’d like to make it very clear that our team is not here to win 2nd place. The journey is long, the work is hard, but we have and we will consistently, systematically, out-innovate our competitors with substantially few resources and in far less time. And we will have a blast doing it.”

Snap is currently in the process of rolling out a major redesign of its application, first announced back in November. The effect that redesign has on user growth and revenue, combined with new ad practices, remains to be seen.

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