Snapchat’s parent firm is reducing the number of employees and investment in struggling businesses as part of cost-cutting measures after a slowdown in ad revenue growth. In a memo to the staff on August 3, 2022, chief executive officer Evan Spiegel announced that Snap Inc. would lay off 20% of its 6,400 employees. The 8% revenue growth in the most recent quarter fell short of the company’s initial projections, necessitating the modification. A favorite social media platform of the young people, Snapchat had never reported a single-digit quarterly revenue growth as a publicly traded firm.
Snap’s sales growth in 2022 was affected by a decrease in advertising investment on its platform. The company is confronted with the need to simultaneously grow and manage costs, while investors lose faith in it. The company is prioritizing user base expansion, ad business optimization, and the discovery of new revenue streams.
The company is also creating three regional president positions in the Americas, Asia-Pacific, and Europe, Middle East, and Africa regions to promote these initiatives. Snapchat, Snap’s primary social media platform, is well-known for enabling users to send messages that vanish after being seen.
The company will also concentrate on developing its Spectacles camera eyewear. In recent quarters, social media companies cited difficulties in generating ad revenue. Marketers are spending less money due to the uncertain economy and the modifications that Apple Inc. made to its privacy policy in 2021 that affected iPhone user ad tracking.
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