Snap Inc. CEO Evan Spiegel announced that the company was laying off 20 percent of its staff, as it is pushing through restructuring moves, the Snapchat founder said this morning.

Snap has been struggling under financial pressure for months. In May, Spiegel wrote in an internal memo that the company would miss its revenue forecasts for the second quarter of the year. And so it did: While revenue for the quarter was $1.11 billion, a 13% year-over-year increase, the company badly missed its previous guidance of 20% to 25% growth.

Our forward-looking revenue visibility remains limited, and our current year-over-year QTD revenue growth of 8% is well below what we were expecting earlier this year," Spiegel wrote in a company memo that the company posted on Snap's website. "For planning purposes, we have modeled a range of outcomes, some of which assume that low revenue growth continues into next year, and we have built our 2023 plan to generate free cash flow even in a low-growth scenario."

According to Snap, laid off employees in the United States will get four months of replacement for compensation, and further financial assistance to help enroll in COBRA. The company said it would "tailor compensation and benefits to reflect local norms" for international employees.

We know that these changes will have a particularly profound effect on team members who rely on work authorizations to live outside of their home countries, and we will provide those team members affected with added support and flexibility in ways that will minimize disruption to their immigration status," Spiegel added.

It will cut costs by slowing down production on Snap-funded originals, minis and games, hardware and standalone apps Zenly and Voisey, along with some reductions in staff. However, the company is committed to developing its augmented reality glasses, Spectacles, and won't drop developing another device: the Pixy drone.

It also promoted senior vice president of engineering Jerry Hunter to chief operating officer, who will focus more on growth and revenue.

"We're transforming our business so that we can focus even more intently on our three strategic priorities: community growth, revenue growth, and augmented reality," Spiegel wrote.

For the past few months, Snap has been testing Snapchat+ subscription service to generate more revenue. The product provides subscribers with early access to new features as well as app icons exclusive only to them, much like Twitter Blue. In just a few weeks, Snapchat+ took in $5 million in revenue, selling 1 million $3.99/month subscriptions. That's chump change compared to what Snap must make in order to become cash-flow positive. But it's a respectable jump — before the subscription product, Snapchat's in-app purchase revenue broke into the five-figures.

Currently, nearly 99% of Snap's revenue comes from its advertising products including Snap Ads and AR Ads, though those businesses have taken a hit from a difficult macroeconomic environment. In an investor update published today, Snap said new sources of medium-term revenue include Snapchat+, Spotlight and Snap Map — in the long term, Snap wants to be a leader in augmented reality.

To calm investor nerves, Snap drew comparisons to Meta, which is seven years the older rival's senior. On a per-user basis, Snap's revenue appears to follow the curve for Facebook but lagged far behind on the growth metric for users. By 2015 - eleven years after its founding for Facebook - the company had exceeded 1 billion DAUs. In the same time frame, Snapchat hit 347 million DAUs.

At the same time, however, Snap continues to see some of its products growing. While its revenue remains stalled, DAUs rose 18% compared to the previous year, and Meta's products have flatlined in growth.