In the midst of massive layoffs, Snap dissolved its Web3 division.

The company's growth rates reached their lowest point in the last five years during the second quarter; consequently, the company has decided to let go of one fifth of its workforce as a result of these declining growth rates.

Snap (SNAP) has made the decision to disband its Web3 team in order to cut costs in light of the fact that the pace of the company's overall growth has slowed significantly.

Jake Sheinman, a co-founder of the Web3 team at Snap and one of its early employees, announced his departure from the company in a tweet that was posted on Thursday. Within the same tweet, he divulged the strategies that the massive social media platform has up its sleeve.

According to what was written in the tweet, "Decisions were made to sunset our [W]eb3 team as a result of the company restructure."

The request for comment that CoinDesk had sent to Sheinman did not receive an immediate response from him.

Evan Spiegel, the CEO of Snap, made this revelation after the company reported its earnings for the second quarter in the month of July. He stated that the executives of the company were concerned about the underperformance of the company.

The company acknowledged in a note to investors that their financial results for the second quarter did not "reflect the scale of our ambition." "The results that we are delivering are not good enough for us," they said.

Snap's second quarter revenue of $1.11 billion, while up 13% from the same quarter last year, came in well below the company's previous guidance of 20% to 25% and was below analyst estimates. While this was Snap's second quarter, it was also the company's best quarter ever.

Despite this, Snap's revenue increased by 13% when compared to the same quarter of the previous year.

A few weeks after initially disclosing the data, Spiegel disclosed on Wednesday that 20% of Snap's workforce will be eliminated as part of the company's upcoming restructuring.

Spiegel stated that "the extent of this reduction should substantially reduce the risk of ever having to do this again," while also mentioning the company's desire to "reaccelerate our revenue growth."

It is anticipated that the layoffs will have a particularly negative impact on the team responsible for developing Snap's augmented reality (AR) Spectacles, bringing an abrupt end to the company's honeymoon phase with AR.

In 2016, three years after the company first introduced Lenses, its own augmented reality (AR) filters, Snapchat began selling augmented reality (AR) eyewear called Spectacles. This was the company's first foray into the wearable technology market.

In 2021, the company made its most significant purchase when it paid more than $500 million to acquire WaveOptics. WaveOptics is the company that supplies the augmented reality displays that are utilized in Snap's Spectacles. This acquisition was the company's most significant purchase to date. The previous year was when this transaction took place.

It was planned that the company would conduct research on a feature that would make it possible for users to import NFTs into Snapchat and use them as augmented reality filters; however, it is currently unknown whether or not this initiative will proceed in light of the impending layoffs. The company had planned to conduct research on the feature as recently as July.