Snap Inc. today disclosed plans to let go 10% of its workforce, or about 500 employees, in its first major round of layoffs since 2022.

The social media company estimates that the restructuring will cost between $55 million and $75 million. Snap expects to incur the bulk of that charge, which mainly comprises severance payments and related expenses, in its current fiscal quarter ending March 31. The company estimates that the restructuring process may extend into the next quarter and potentially beyond.

“We are reorganizing our team to reduce hierarchy and promote in-person collaboration,” a Snap spokesperson told CNBC. “We are focused on supporting our departing team members.”

Snap previously laid off 20% of its workforce, or about 1,200 employees, in August 2022. The company said at the time that the job cuts were designed to help it address slowing revenue growth. As part of the restructuring initiative, Snap also nixed several products, including its Zenly map app and Snap Games video game service.

The layoffs that the company announced in 2022 were followed by several quarters of declining revenue. Last quarter, Snap broke that streak and grew its sales by 5% year-over-year to $1.19 billion. Analysts were expecting $1.11 billion.

Snap generates most of its revenue by selling ad space in its Snapchat social media app to brands. It offers multiple ad formats, including an augmented reality option that enables marketers to overlay promotional content on footage from the user’s phone camera. Additionally, it provides analytics tools that help brands measure and optimize the effectiveness of their campaigns.

Another portion of Snap’s revenue comes from a paid version of its app called Snapchat+. For a $4 monthly subscription, users receive a profile badge and early access to new features. It’s estimated that Snapchat+ generates $240 million in annualized recurring revenue for the company.

Snap is set to report financial results for its fiscal fourth quarter on Tuesday. The company is expecting revenues of between $1.32 billion and $1.375 billion, which would represent a year-over-year growth rate of 2% to 6%. It forecasts adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, of between $65 million and $105 million.

Snap rival Meta Platforms Inc. has also reduced its workforce to reduce costs. The Facebook parent reportedly let more than 20,000 employees go through three rounds of layoffs that began in late 2022. Following Meta’s quarterly earnings report last week, which investors received enthusiastically as they boosted Meta’s share more than 20%, Chief Executive Mark Zuckerberg stated that the company intends to keep hiring “relatively minimal compared to what we would have done historically.”

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