Snap Slows Hiring Amid Low Q2 Revenue Growth Expectations

key point

  • Snap has employed 2,000 people in the last 12 months.
  • Snap shares plunged 30% in Monday’s extended trading.
  • Snap asked executives to ‘review spending’ for the rest of 2022.

Camera and social media company Snap has told employees it will delay hiring for the rest of the year. The news led to a 30% drop in Snap shares in Monday’s extended trading.

in memo Snap’s CEO, Evan Spiegel, said in a report to employees, “We plan to hire more than 500 new team members from now through the end of the year.” Snapchat’s parent company has hired about 2,000 new employees in the last 12 months. The memo obtained by Verge also cited “rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, and the impact of the Ukraine war” as reasons for Snap’s recent struggle.

As part of an effort to further cut spending, Spiegel said Snap has asked executives to “review spending” for the remainder of 2022.

The news that Snap’s hiring was slow came shortly after the company disclosed it to regulators. filing “The macroeconomic environment is deteriorating faster than expected,” it told the Securities and Exchange Commission (SEC). As a result of the worsening, Snap reported that “sales and adjusted EBITDA are likely to report below the lower bound of the Q2 2022 guidance range”.

Following warnings of lower-than-expected returns, Snap 30% drop CNBC reported in after-hours trading. Other social media companies also fell after Snap submitted, with Facebook’s parent company Meta falling 7% and Pinterest down 12%. Twitter fell nearly 4% on Monday. CNBC predicted that if Snap plunged more than 26.6% in trading on Tuesday, it would be its worst day since it went public five years ago.

last quarter, snap expectation Q2 revenue will grow between 20% and 25%. These forecasts were lower than Wall Street estimates, Axios reported. But Snap isn’t the only company experiencing stagnant growth.

Earlier this month, Meta announced that it would do one of the following: Delay or temporarily freeze hiring Many mid-level positions. CNN reported that Meta’s job slowdown announcement came a week after it posted the slowest quarterly sales growth in years.

Meta’s Q1 2022 earnings were down 21% compared to the same period in 2021. Facebook’s parent company faced ad disruptions following Apple’s overhaul of its privacy practices and Russia’s blocking of Facebook and Instagram in April.

The Snapchat app can be seen on the smartphone in this picture taken on July 13, 2021. Photo: Reuters/Tea Ceremony Rubick

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