Amid significant layoffs, Snap dissolved its Web3 division.

The company's growth rates fell to their lowest point in the past five years during the second quarter, and as a result, it has decided to let go of one fifth of its workforce.

Snap (SNAP) has made the decision to fire its Web3 team in an effort to cut costs in light of the company's noticeably slowed growth.

Co-founder of Snap's Web3 team Jake Sheinman announced his departure from the company in a tweet on Thursday. He also disclosed the plans the social media giant has in store in the tweet.

The tweet stated that "decisions were made to sunset our [W]eb3 team" as a result of the company restructure.

Sheinman did not respond right away to CoinDesk's request for a comment.

Snap CEO Evan Spiegel revealed that the company's executives were worried about the company's underperformance after the company released its earnings for the second quarter in July.

The company admitted in a note to investors that "our financial results for Q2 do not reflect the scale of our ambition." We're not happy with the outcomes we're producing, we say.

Although up 13% from the same quarter last year, Snap's second quarter revenue of $1.11 billion fell far short of both analyst expectations and the company's previous guidance of 20% to 25%.

Even so, Snap's revenue increased 13% compared to the same quarter last year.

A few weeks after first making the information public, Spiegel revealed on Wednesday that Snap will be laying off 20% of its workforce.

The extent of this reduction, according to Spiegel, "should significantly lower the risk of ever having to do this again, while balancing our desire to invest in our long-term future and reaccelerate our revenue growth."

The layoffs are expected to have a particularly negative effect on Snap's augmented reality (AR) Spectacles team, bringing the company's AR honeymoon to a quick end.

Snapchat started selling augmented reality (AR) eyewear called Spectacles in 2016, three years after the company first released Lenses, its own augmented reality (AR) filters.

When the company spent more than $500 million to buy WaveOptics, the supplier of the augmented reality displays used in Snap's Spectacles, in 2021, it made its biggest acquisition. The previous year was when this transaction took place.

The company had planned to research a feature that would allow users to import NFTs into Snapchat and use them as augmented reality filters as recently as July, but it is currently unclear whether or not this initiative will proceed in light of the upcoming layoffs.