Report: Snap lays off 18, eyeing slower job growth for next year
- Snap Inc., the parent company of image-messaging application Snapchat, cut 18 people in the recruiting division that has been seen as a key part of its rapid growth strategy. The company declined to comment beyond a statement that confirmed the cuts, which were first reported by Business Insider.
- Snap is planning to slow its hiring next year, according to an email CEO Evan Spiegel sent to employees last month viewed by Business Insider. The message noted that managers would be asked to make "hard decisions" about employees who aren't performing,
- In September, Snap cut a dozen people in the hardware division that makes its Spectacles camera glasses and also shuffled around some employees' roles. More cuts could be made as managers institute a new system for evaluating employee performance, unnamed sources told Business Insider. The company's headcount has jumped in the past two years from 600 employees at the end of 2015 to 2,600 in Q3 2017.
Snap is showing more growing pains as the company contends with slower audience growth and greater competition from social networks like Facebook, whose photo-sharing app Instagram has copied several of Snapchat's key features in the past year. Snap, whose stock lost about one-third of its value since its initial public offering in March, is expected to report Q3 results on Nov. 7. Analysts estimate the company will report a loss of 31 cents a share.
While the company is making strategic job cuts in areas like recruiting and hardware development, it continues to put more resources into developing original content to keep users engaged with its app. On Oct. 16, Snap announced a joint venture with NBCUniversal to produce original scripted shows for mobile viewing. Snapchat's current roster of content providers includes ESPN, ABC, BBC, A+E Networks, Discovery Networks, Turner, Vice, CBS and others.
Despite its troubles, Snapchat also continues to grow in popularity with teens and "digital natives" who have never known a world without smartphones. Snapchat is the preferred social media platform for nearly half — 47% — of teens, marking an increase of 12 percentage points year-over-year, according to a recent Piper Jaffray survey. Only 24% of teens said Instagram was their favorite social media platform, marking a rise of 1 percentage point, while both Facebook and Twitter dropped in popularity to 9% and 7%, respectively.
- Business Insider Snap hit with more layoffs, plans to slow hiring in 2018
- The Wall Street Journal SNAP Analyst Estimates & Rating