Snap, the parent company of Snapchat, has announced the layoff of nearly 20 employees from its product management team, as part of a restructuring and workforce reorganization.
According to Snap, the layoffs were not related to any specific product but were part of the company’s goal to boost decision-making speed and minimize overhead cost.
The job cuts come after Snap recently posted third-quarter (Q3) earnings of 2023 in which its overall sales grew 5 percent (Year-over-year) to $1.19 billion, surpassing analyst expectations, and earnings per share of 2 cents adjusted, versus an expected 4-cent loss.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Its global daily active users were also at 406 million, above the 405.7 million expected. This was in line with Wall Street’s projection of 405.8 million daily active users for the app.
The company’s stock initially surged from $9.70 to $10.91 on the news, but then hit a low of $9.30 as investors responded to the company’s lack of guidance for the quarter ahead, citing the onset of the Middle East war between Israel and Hamas.
Snap, like its biggest rival Meta, disclosed to investors that it has seen some recent pauses in advertising owing to the ongoing Middle East conflict. As a result, Snap stated that it would not issue formal instructions due to the unpredictable nature of war.
Snap CEO Evan Spiegel said the company is focused on improving its advertising platform to drive higher return on investment for its advertising partners, noting that the company has evolved its go-to market efforts to better serve its partners and drive customer success.
Despite the layoff of nearly 20 employees in its product team, Snap has been growing its headcount in other areas. Recently, the social media giant hired a number of technical staff over the past few quarters, including former Google VP of Engineering, Eric Young as its SVP of Engineering.
The company has also made a few advertising-related hires, which includes former Meta VP of global agency sales, Patrick Harris as President of Americas; former Google head of U.K, Ronan Harris as President of EMEA and former Meta head of India, Alit Mohan as President of APAC.
For the fourth quarter (Q4), Snap told investors it expects revenue to be $1.32 billion-$1.375 billion, implying year-over-year revenue growth of approximately 2% to 6%.
The company in part cited the Israel-Hamas war for limited visibility into advertising demand for the year-end quarter. It further noted that due to the unpredictable nature of the war, it believes it would be imprudent to provide formal guidance for Q4.