Snap’s Web3 Team Apparent Victim of 20% Downsize

Snap appears to have axed its Web3 team as part of the social media company’s decision to restructure and cut its headcount by about 20%. 

Jake Sheinman revealed in a tweet Wednesday that it was his last day at Snap. Most recently working as a research and development program manager, he first joined the company as an account specialist in December 2018, according to his LinkedIn profile. 

“As a result of the company restructure, decisions were made to sunset our [Web3] team,” Sheinman tweeted. “The same team that I co-founded last year with other pirates who believed in digital ownership and the role that [augmented reality] can play to support that.” 

Sheinman and Snap did not immediately return a request for comment.

While Web3 wasn’t explicitly mentioned, Snap CEO Evan Spiegel said in a Wednesday blog post that investments Snap made to various business lines were under the assumption of a higher rate of revenue growth. The Snapchat community doubled in size since the company’s initial public offering in 2017 and the company’s trailing twelve month revenue has gone up 10 times since then, he added.

But despite seeing a 13% year-over-year revenue increase to about $1.1 billion during the second quarter, Snap reported a net loss of $422 million during the three-month span. 

Somewhat surprisingly, Snap stock is up 16% since Tuesday’s close, while the tech-heavy NASDAQ 100 has slipped more than 1%.

“Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses,” the CEO wrote on Wednesday. “We are restructuring our business to increase focus on our three strategic priorities: community growth, revenue growth, and augmented reality.”

Sheinman said on LinkedIn that he was on Snap’s emerging mobile apps team, where he supported fintech and crypto companies — such as Coinbase, Cash App, Dave, and Robinhood — to acquire new users. He later helped start Snap’s Web3 team within its product development and research division, he added. 

Snap was exploring plans to allow users to show off NFTs on its app, the Financial Times reported in July. Creators were reportedly set to start testing the feature at the end of August, though it is unclear whether that process began.

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