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Snap reportedly plans to lay off around a fifth of its employees (update)

The company has been struggling this year, with its share price nosediving by 80 percent.

Dado Ruvic / reuters

Update 8/31 2:23PM: Snap has confirmed it's laying off around 1,300 people in an attempt to bring down costs. The company is also ending production of most original Snapchat shows and shutting down other projects as part of broad restructuring moves. The original story is below.

Snap is reportedly preparing to lay off around 20 percent of its staff. The company, which has more than 6,400 employees, will start letting people go on Wednesday, according to The Verge. Snap declined to comment to Engadget.

There will reportedly be cuts among the company’s hardware division, which recently halted development on the Pixy selfie drone. The report suggests a group that was working on tools to help developers build games and mini apps on Snapchat will be among the hardest hit by the cuts. Social mapping app Zenly, which Snap bought in 2017 and kept running independently, is expected to be heavily impacted. The advertising sales team will also be restructured, according to the report.

It’s been a rough year for Snap, which has seen its stock price fall by 80 percent since January amid a broader economic slowdown that has affected many notable tech companies. Snap has said it would look to cut costs while bringing in fewer new hires. The company posted weak earnings results for the April-June quarter, which led to its stock dropping by 40 percent.

One recent bright spot for Snap is the $4 per month Snapchat+ subscription service, which offers early access to new features, such as seeing who re-watched a story and pinning a friend to the top of the chat history. More than 1 million people signed up in the first month or so.