Snap is closing its division that produces augmented reality services for enterprises within months of its launch.
According to Snap, which like other social media companies has been bearing the brunt of low advertising spending from inflation-hit businesses since early last year, the division’s shutdown will result in around 170 job losses.
The company that created the photo messaging app Snapchat, Snap, launched AR Enterprise Services in March in an effort to diversify its revenue sources beyond the mostly reliant on digital advertising. The division, though, found it difficult to pick up.
“It would take significant incremental investment to grow our enterprise offering for retailers and we simply cannot make that investment at this time,” CEO Evan Spiegel wrote in a message to staff. Spiegel added that the company is focusing its resources on the core advertising business.
CEO Spiegel claimed that as generative AI became more widely used, it became more difficult for Snap to differentiate its product, which allowed customers to use its augmented reality technology on their websites as businesses developed their own experiences.
