Snap dissolved its Web3 division amid massive layoffs.

In the second quarter, the company's growth rates reached their lowest point in the past five years; consequently, the company has decided to lay off one-fifth of its employees.

Snap (SNAP) has decided to terminate its Web3 team in an effort to reduce expenses in light of the company's significantly slowed growth.

Jake Sheinman, co-founder of Snap's Web3 team, announced his retirement in a tweet published on Thursday. In the tweet, he also disclosed the social media behemoth's future plans.

According to the tweet, "As a result of the company's restructuring, the decision was made to disband our [W]eb3 team."

CoinDesk's request for comment from Sheinman was not immediately met with a response.

In July, following the release of the company's second-quarter earnings, Snap CEO Evan Spiegel disclosed that the company's executives were concerned about the company's underperformance.

The company acknowledged in a note to investors that its second-quarter financial results fell short of expectations. We are not pleased with the outcomes we are producing.

Snap's second-quarter revenue of $1.11 billion, while up 13% from the same period last year, was well below the company's previous guidance of 20% to 25% and analyst estimates.

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

Spiegel disclosed on Wednesday that 20% of Snap's workforce will be eliminated, several weeks after the data was initially disclosed.

Spiegel wrote, "The magnitude of this reduction should significantly reduce the likelihood of ever having to do this again, while balancing our desire to invest in our long-term future and reaccelerate revenue growth."

It is expected that the layoffs will have a particularly negative impact on Snap's augmented reality (AR) Spectacles team, abruptly ending the company's love affair with AR.

Snapchat began selling augmented reality (AR) eyewear known as Spectacles in 2016, three years after the company first introduced Lenses, its own AR filters.

WaveOptics, the provider of the augmented reality displays used in Snap's Spectacles, was acquired by the company for more than $500 million in 2021, marking the company's largest acquisition to date. This transaction occurred in the previous calendar year.

Prior to the impending layoffs, the company had planned to conduct research on a feature that would allow users to import NFTs into Snapchat and use them as augmented reality filters; however, it is currently unknown whether or not this initiative will continue.

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