Skip to main content

Snap plans to slow hiring, warns that revenue will grow slower than expected

Snap plans to slow hiring, warns that revenue will grow slower than expected

/

Snap will only hire 500 more people this year versus 2,000 over the past 12 months.

Share this story

Evan Spiegel-recode linkpost-Asa Mathat
Snap CEO Evan Spiegel.

Snap CEO Evan Spiegel told employees Monday that the company would significantly slow hiring for the rest of the year after warning investors that its revenue wouldn’t grow as fast as expected.

“Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more,” Spiegel wrote in a memo to employees obtained by The Verge. He went on to say that Snap expects to report revenue below the low-end of the guidance it gave investors for the current quarter. That news was also disclosed in a filing with the SEC that sent Snap’s stock price cratering to a low it hasn’t seen since mid-2020.

Like its larger competitor in social media, Meta, Snap plans to pull back on hiring for the rest of the year, though Spiegel said the company will continue to recruit for roles already listed. He said Snap plans to hire 500 more people this year versus the 2,000 new people it hired over the past 12 months. In addition, he said managers have been asked to “review spending to find additional cost savings.”

Here is Spiegel’s full memo Monday to employees:


Team,

Thank you so much for your hard work executing through this challenging macroeconomic environment. Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more.

Today we filed an 8-K, sharing that the macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month. As a result, while our revenue continues to grow year-over-year, it is growing more slowly than we expected at this time. We believe it is now likely that we will report revenue and adjusted EBITDA below the low end of the guidance range we provided for this quarter.

We believe that the progress we’ve made growing our revenue, combined with the strength of our balance sheet, has positioned us well for the current environment. The fundamentals of our business remain strong, our community is growing and engaged, and we are excited about the many opportunities ahead. As a result, 2022 remains a significant investment year for Snap, despite the ongoing market volatility.

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.

We will continue to hire new team members, including recruiting for open roles.

We will slow our pace of hiring for unopened roles for the remainder of the year, as well as push some planned hiring into next year.

We expect to hire more than 500 new team members between now and the end of the year, representing nearly 10% company-wide headcount growth over the next seven months. This is in addition to over 900 offers already accepted this year, up 41% year-over-year, and the roughly 2,000 people added to our team in the trailing 12 months.

We will continue to backfill existing positions that become available as a result of attrition if those roles remain a high priority for our teams.

We will also evaluate the remainder of our 2022 budgets and leaders have been asked to review spending to find additional cost savings.

Our most meaningful gains over the coming months will come as a result of improved productivity from our existing team members, as we work together and help our new team members get to know Snap and learn how to contribute to their full potential.

Thank you so much for all your hard work and commitment to our community and partners. Through many ups and downs over the past decade you have made clear your ability to see through the short term and invest in our long term success.

Evan

Today’s Storystream

Feed refreshed Sep 25 Not just you

E
Twitter
Emma RothSep 25
Rihanna’s headlining the Super Bowl Halftime Show.

Apple Music’s set to sponsor the Halftime Show next February, and it’s starting out strong with a performance from Rihanna. I honestly can’t remember which company sponsored the Halftime Show before Pepsi, so it’ll be nice to see how Apple handles the show for Super Bowl LVII.


E
Twitter
Emma RothSep 25
Starlink is growing.

The Elon Musk-owned satellite internet service, which covers all seven continents including Antarctica, has now made over 1 million user terminals. Musk has big plans for the service, which he hopes to expand to cruise ships, planes, and even school buses.

Musk recently said he’ll sidestep sanctions to activate the service in Iran, where the government put restrictions on communications due to mass protests. He followed through on his promise to bring Starlink to Ukraine at the start of Russia’s invasion, so we’ll have to wait and see if he manages to bring the service to Iran as well.


E
External Link
Emma RothSep 25
We might not get another Apple event this year.

While Apple was initially expected to hold an event to launch its rumored M2-equipped Macs and iPads in October, Bloomberg’s Mark Gurman predicts Apple will announce its new devices in a series of press releases, website updates, and media briefings instead.

I know that it probably takes a lot of work to put these polished events together, but if Apple does pass on it this year, I will kind of miss vibing to the livestream’s music and seeing all the new products get presented.


E
External Link
Emma RothSep 24
California Governor Gavin Newsom vetoes the state’s “BitLicense” law.

The bill, called the Digital Financial Assets Law, would establish a regulatory framework for companies that transact with cryptocurrency in the state, similar to New York’s BitLicense system. In a statement, Newsom says it’s “premature to lock a licensing structure” and that implementing such a program is a “costly undertaking:”

A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.


Welcome to the new Verge

Revolutionizing the media with blog posts

Nilay PatelSep 13
A
Youtube
Andrew WebsterSep 24
Look at this Thing.

At its Tudum event today, Netflix showed off a new clip from the Tim Burton series Wednesday, which focused on a very important character: the sentient hand known as Thing. The full series starts streaming on November 23rd.


A
The Verge
Andrew WebsterSep 24
Get ready for some Netflix news.

At 1PM ET today Netflix is streaming its second annual Tudum event, where you can expect to hear news about and see trailers from its biggest franchises, including The Witcher and Bridgerton. I’ll be covering the event live alongside my colleague Charles Pulliam-Moore, and you can also watch along at the link below. There will be lots of expected names during the stream, but I have my fingers crossed for a new season of Hemlock Grove.


T
Twitter
Tom WarrenSep 23
Has the Windows 11 2022 Update made your gaming PC stutter?

Nvidia GPU owners have been complaining of stuttering and poor frame rates with the latest Windows 11 update, but thankfully there’s a fix. Nvidia has identified an issue with its GeForce Experience overlay and the Windows 11 2022 Update (22H2). A fix is available in beta from Nvidia’s website.