Snap Inc (NYSE:SNAP) surged over 3.5% to $11.27 in early trading on Thursday as surged around 9% in last session following the firm finally decides to downsize 20% of all staff and close some of projects. The firm said this decision will help to save around $500 million annually. At glance, shares of Snap In. (SNAP) has plunged over 79% this year that leads to the worst year since initial public offering.
Social Media App Making Company was busy adding staff and releasing new initiatives, comprising a camera drone and a content push for its “Originals” scripted videos with a series starring gymnast Simone Biles.
In response to a number of financial issues, Snap is now scaling down on its objectives, revealed on Wednesday aims to cut jobs a fifth of its personnel as part of a strategic reorientation. This decision highlights how quickly Snap’s fortunes have changed. Snap Chat said that it is cutting back on spending in a number of areas, dumping projects including its in-house “Originals” content and confirming a previous accuse by The Wall Street Journal grounding the drone project.
According to a message delivered to colleagues on Tuesday by CEO Evan Spiegel, Snap Inc. will lay off around 20% of its 6,400 employees. As per reported by Bloomberg data, the change was necessary for reason that revenue growth of 8% in the current quarter dropped short of the firm’s initial assumptions. Young people’s favorite social media platform Snap has never posted single-digit quarterly revenue growth as a publicly traded firm.
According to Spiegel’s message, any initiatives that don’t help the company’s augmented reality products, expanding user base, or revenue would be axed or given “significantly decreased funding.” While we’ll keep working to speed up revenue growth, we also need to assure Snap’s long-term success in any situation.
Snap’s sales growth this year has been severely hampered by a decrease in advertising investment on its platform. Jerry Hunter, a recently hired chief operational officer who formerly served as senior vice president of the engineering team, will now be responsible for overseeing the staff members of the underperforming advertising sales divisions. Prior to his departure for a position at Netflix, Chief Business Officer Jeremi Gorman was responsible for leading the company’s ad divisions.
Bernie Grady is a technology and business journalist who writes about trending topics in the world of technology, entertainment, and business. She has a keen eye for spotting new trends and loves to share her insights with her readers. Bernie has been writing professionally for over 10 years and has experience covering a wide range of topics. When she’s not writing, she enjoys spending time with her family and friends.