After ending its tumultuous first year with a widely-criticized redesign, Snap Inc.'s (SNAP) - Get Report is reportedly planning to lay off about 100 software developers in what would be the company's largest round of cuts to date.
The layoffs will affect less than 10% of the company's engineering team, according to a report from Cheddar citing sources familiar with the matter. The company laid off a few dozen employees in its hardware and recruiting divisions in October 2017, and two dozen more in January, according to Cheddar.
Snap shares rose almost 1% Thursday, closing at $18.02. Since the beginning of the year, the stock has increased 23%.
Snap did not return a request for comment for this story.
"[Snap] was spending money like 1980s rock stars," said GBH Insights analyst Daniel Ives. "I think they finally woke up and realized they need to make some strategic cuts."
While employees will be unhappy, Ives said the layoffs will show investors "that there's a pilot on the plane...this speaks to a company going through a transition that needs to adjust accordingly."
Since its initial public offering a year ago, the app developer has struggled to monetize the app and compete with Action Alerts Plus holding's Facebook Inc. (FB) - Get Report and Instagram Stories. However, in February, Snap finally beat earnings estimates last quarter for the first time ever.
Later that month, Snap released a redesign of the app an effort to broaden its audience. But the new look garnered backlash from its users -- including social media star Kylie Jenner -- resulting in a petition to reverse the changes and the promise of an update in the coming weeks.