Snap cutting 20% of staff as ad sales continue to dry up; shares rise 10%

The parent company of social media platform Snapchat said Wednesday that it is letting go of 20% of its staff as it reorganizes and tries to reduce costs in the face of declining sales.

In a letter to staff posted on Snap Inc.'s website, CEO Evan Spiegel said sales were not keeping up with earlier projections.

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, Spiegel wrote.

Spiegel said Snap was restructuring its business to focus on community growth, revenue growth and augmented reality. Anything that doesn't contribute to those three areas will be discontinued or receive substantially reduced investment, Spiegel said.

Last fall, Snap said its ad sales were being hurt by a privacy crackdown that rolled out on Apple's iPhones, which raised investor fears about the app's potential for growth. Most social media platforms rely heavily on advertising revenue, one reaso