(Reuters) – Snap Inc announced on Wednesday that it will be closing down its division dedicated to creating augmented reality (AR) services for businesses. This decision comes only a few months after the division was launched, as the ad-reliant social media company continues to face challenges in a difficult economy.
The closure of this division will lead to 170 job losses, Snap confirmed. In a note to employees, CEO Evan Spiegel explained, “After thoroughly exploring our options over the past few months, it became evident that it would require significant additional investment to expand our enterprise offering for retailers. Unfortunately, we are unable to make that investment at this time.”
The impact of the COVID-19 pandemic has undoubtedly played a role in Snap’s struggles. As businesses reduce their advertising spending due to economic uncertainties, the company’s revenue has been significantly affected. Snap’s decision to shut down its AR-focused division is a reflection of the challenges it faces in generating revenue from this segment.
Some analysts suggest that Snap’s move to close this division is not surprising, given the current economic climate. With businesses cutting costs and focusing on core operations, investments in emerging technologies like AR may not be seen as a priority.
However, despite this setback, Snap remains committed to its core business of providing a platform for users to share photos and videos through its Snapchat app. The company’s decision to prioritize its Snapchat platform over its AR services division underscores its dedication to its main revenue stream and its desire to streamline operations.
Despite the closure of the AR division, Snap will continue to offer AR features within its Snapchat app, allowing users to enjoy augmented reality experiences. This move reflects the company’s focus on user engagement and its dedication to continuously enhancing the Snapchat experience.
The closure of Snap’s AR-focused division highlights the challenges faced by businesses operating in the augmented reality space, particularly in these uncertain times. As the economy recovers and businesses regain stability, it will be interesting to see if Snap and other companies in the AR sector can bounce back and find success.
(Reporting by Chavi Mehta in Bengaluru; Editing by Shinjini Ganguli)
Credit: The Star : Tech Feed
