The parent company of Snapchat, Snap Inc. is letting off 20% of its staff. The company claimed that it had to do this to lower its costs while the ad sales were declining. Go through the entire article to learn more about the reason that caused this development.
Statements given by Evan Speigel
Evan Speigel, the CEO of the company claimed that the sales of the company were not that good. “Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses,” Spiegel wrote. Currently, the business is not experiencing any growth which is why it is trying to restructure and lay due emphasis on community growth, increasing its revenue, etc. Anything that doesn’t contribute to those three areas “will be discontinued or receive substantially reduced investment,” Spiegel said.
Snap’s financial crisis
Recent reports suggest that last year, Snap claimed that its ad sales were not doing that well because of the privacy issues that were taking place on Apple phones. Due to this, the investors started doubting the company and its potential for growth. One of the major sources for social media apps to make money is through advertising. That wasn’t possible when apple introduced privacy controls which is why it faced some heavy criticism from Facebook as well. Coming back to Snap Inc., as per reports, they reported their last profit in the last quarter and there has been no going up from there ever since.
Data shared by Snap
In the month of May, the “macroeconomic environment has deteriorated further and faster than anticipated” was reported said by Snap in a SEC filing after it lost half of its value. the company claimed that it wasn’t able to meet its profit targets. Snap is in tight shape right now, therefore it is planning to lay off some of its employees. They are some leadership changes made by company for eg. Jerry Hunter got a promotion and was given the COO.
About Snap.Inc
This company basically is about the camera and how it can people express themselves in the best way possible. The company believes in new ways to invent camera so that they can improve the quality of life and communication of people. The company plays a role in the enhancement of human beings by giving them a way to express their emotions and vulnerabilities and having fun doing so.
