The main source of income for any social network is advertising, Snap-A is not going to be the exception. Given the drop in demand for it due to the recession, the firm has decided to cut staff by 20% according to Hannah Murphy in the Financial Times.
Snap plans to lay off a fifth of its 6,500-person workforce, according to a person familiar with the situation, in a dramatic shakeup as the social media group battles a drop in ad demand.
The Los Angeles-based company had rapidly expanded its workforce during the first two years of the coronavirus pandemic, as social media platforms grew rapidly and users spent more time and money online during lockdowns.
However, this year’s boom has turned into a deep sell-off in stocks amid high inflation and a broader economic slowdown, forcing the biggest tech groups like Meta and Google to freeze trading. contracting and seek other cost-cutting measures.
Snap is preparing to cut about 20% of its workforce, which was 6,446 at the end of June, and restructure its ad team, the person said.
Chief commercial officer Jeremi Gorman and Peter Naylor, Snap’s vice president of ad sales for the Americas, will be leaving the company as part of the restructuring, according to a report by The Verge, which was confirmed by Snap.
The company declined to comment on the layoff figures, which were first reported by The Verge.
Snap has lost nearly 80% of its value so far this year, after issuing an earnings warning in May and posting dismal second-quarter results in July.
In both cases, he said difficult macroeconomic conditions had caused advertisers to cut their budgets, and also blamed increased competition in the industry and Apple’s privacy changes that have made it harder for apps to target ads and measure success. of the campaigns.
In its earnings statement in July, Snap said it was “not satisfied” with its earnings “regardless of the current headwinds.”
Chief Executive Evan Spiegel also said the company planned to focus on product innovation, diversifying revenue and investing in its direct response advertising business to tackle the slowdown.
Snap-A closed the session on Tuesday at $9.39 lower, with the 70-period moving average above the price. Meanwhile, Ei indicators are mostly bearish.