Snapchat no longer has an office presence in San Francisco.
As part of its recent restructuring, which led to at least 1,200 full-time employees being laid off and a number of projects being shut down, parent company Snap decided to close its office in the city, a person familiar with the decision said.
Snap disclosed in a footnote to its third-quarter results that an unspecified "lease exit" was part of $155 million in costs the company incurred related to its reorganization. Snap's San Francisco lease wasn't due to end until November 2024, according to another person familiar with the situation. Both people asked not to be identified discussing private matters.
A Snap spokesperson said the office "was used consistently by only a handful of team members following our move to flexible work" and that they are now offered access to "a co-working space in the city." He also pointed to the company's "flexible work policy" and said an office in nearby Palo Alto is open.
The move is another blow to San Francisco, formerly a mecca for tech workers and glitzy modern offices. The city's office sector had one of its slowest quarters recently, with the vacancy rate climbing to a record high 25.5% at the end of September, according to the San Francisco Chronicle, which cited data from real estate brokerage CBRE.
Undertaking such a drastic restructuring does not seem to have done much to please Wall Street as yet. Revenue growth continued to slow in the third quarter, with Snap again citing a decline in spending by advertisers, something executives said will likely continue the rest of the year. Its loss grew 400% year over year, only about half of that due to the restructuring. Snap's share price fell about 30% on Friday to $7.38, down more than 80% this year.
The company opened the 33,000 square foot San Francisco office in 2017, shortly after it went public that year. It provided office space for more than 200 workers, mainly engineers, at one point. The pandemic forced most tech employees to work from home. That's left large companies with huge and costly real estate footprints that may be little used. Some companies, including Apple and Google, have started to require workers to come back to an office a certain number of days per week.
Social media platforms seem to have more permanently embraced a remote work culture. Facebook, which last year changed its name to Meta, does not require a certain number of days in the office. Twitter was the first to announce it would be allowing any employee to permanently work remotely, although that is likely to change if Elon Musk takes over the company.
Snap Founder and CEO Evan Spiegel discussed his own experience with remote work at this year's Code conference in Los Angeles. He said being able to work from home "profoundly changed my life" because he was able to see his two young children more. "It was much harder before the pandemic, because I really rarely saw our kids," Spiegel added.
San Francisco is still listed on Snap's website as one of its office locations, alongside two dozen other listed office locations, including one in nearby Mountain View, California. The company is headquartered in Los Angeles, where it has more than 400,000 square feet of office space in Santa Monica.
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