Snap Inc (NYSE: SNAP) is closing its augmented reality enterprise services (ARES) division, just months after its launch in March.

The decision comes as the company, known for its photo messaging app Snapchat, grapples with the economic challenges exacerbated by weak advertising spending from businesses affected by inflation.

The shutdown of ARES will result in approximately 170 job cuts, according to the company. Snap initiated the division in March with the aim of diversifying its revenue streams beyond its heavily ad-dependent model. However, the endeavor faced challenges and failed to gain traction in the market.

“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 note to employees. He said that the company had to instead redirect its resources to the core advertising business.

Read: Snap Plummets Following Disappointing Forecast

This move follows Snap’s broader efforts to streamline its operations, including a 20% reduction in staff, restructuring of the advertising sales unit, and discontinuation of certain projects, such as mobile games, as part of a focused strategy to enhance sales.

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