Snap will slow down hiring in the coming months to battle dwindling revenue and advertising profits. The company won’t hit its quarterly revenue projections which will result in lesser hiring opportunities. Snap will join the likes of many companies that have resorted to hiring slowdowns.
An internal memo shared by Snap’s CEO reveals that the company will miss its revenue expectations. Therefore, the coming months will witness a slowdown in hiring and cutting costs wherever possible.
Why did Snap resort to a hiring slowdown?
Snap’s revenue isn’t as high as the company expected it to be. Despite registering year-on-year growth in revenue, the company failed to hit the revenue targets that make it more profitable. Snap blames the Russia Ukraine conflict to be one of the key factors in the dwindling revenue.
The company stopped accepting advertising opportunities from the Russian state. Moreover, lesser advertising means a huge decline in profits. Apple introduced the ATT measures last year which further slashed the revenue opportunities.
Now, apps like Snap, and Facebook cannot track users across apps. Rather than enabling tracking by default, Apple introduced it as an opt-in feature. Snap lost millions in advertising revenue because of that.
Delayed hiring is merely one of the tactics that companies resort to during tough times. The rising inflation, loss in user base, Russia Ukraine conflict, etc are some of the many factors. Due to these factors, platforms like Facebook and Snapchat are struggling to meet their revenue targets.
Snapchat hired 2000 new employees last year. But this year, it isn’t eager to touch or surpass the number. Instead, it will maintain frugality in hiring and will only replace vacant positions of absolute importance. Snap’s CEO declined any news of hiring freezes or layoffs, both of which are increasingly common at Twitter.
“Responsibly managing our expenses will allow us to invest through this period of time and emerge stronger as a business. Moving forward, we will be taking steps to reprioritize our investments — continuing to invest across our business priorities, but in many cases doing so at a slower pace than we had planned given the operating environment,” Spiegel told the employees in a memo obtained by The Verge.