Snap is laying off 20% of its workforce and restructuring its business to increase focus on three strategic priorities: community growth, revenue growth and AR. According to Snap's SEC filing, the layoffs are expected to save the company US$500 million in annual costs. Snap is discontinuing its investments in Snap Originals, Minis, Games, and Pixy, among other areas. It has also started the process of winding down the standalone applications Zenly and Voisey.
"Projects that don’t directly contribute to these areas will be discontinued or receive substantially reduced investment," founder and CEO Evan Spiegel said in the filing. He explained that the scale of these changes vary from team to team, depending upon the level of prioritisation and investment needed to execute against Snap's strategic priorities. Snap declined to comment on MARKETING-INTERACTIVE's queries about the APAC region.
According to media reports including the Financial Times and The Verge, Snap has more than 6,400 employees globally. Meanwhile, the company's chief business officer, Jeremi Gorman, and VP of sales for the Americas, Peter Naylor have left to join Netflix, multiple media outlets including The Wall Street Journal said. Gorman will take on the role of president of worldwide advertising while Naylor will join as VP of ad sales, WSJ said.
Snap has since created an Alumni Talent Hub for the team members who have been impacted, including those from marketing, sales and creative.
Amidst the layoffs and leadership shuffle, Snap has promoted Jerry Hunter to COO effective immediately. Hunter now leads its monetisation efforts across APAC, EMEA and the Americas, as well as its growth, partnerships and content, AR Enterprise, and SMB teams. He will also continue to lead the engineering teams that currently report to him.
Snap is also creating a new president role in each region to realign its regional operational leadership. While it is currently on the hunt for presidents in APAC and the Americas, Snap has appointed Ronan Harris, VP and MD of UK and Ireland at Google to oversee EMEA as president. He will report to Hunter. According to Spiegel, the three regional presidents will provide in-market leadership, lead cross-functional efforts across the business, oversee local operational needs, and lead Snap's go-to-market strategy.
"The extent of this reduction should substantially reduce the risk of ever having to do this again while balancing our desire to invest in our long-term future and reaccelerate our revenue growth. Overall, the size of our team will remain larger than it was at this time last year," Spiegel explained.
Prior to this latest restructuring, Snap has shown commitment to the APAC region by expanding its local team in Singapore. In June, it appointed Saurabh Dangwal as head of global brands APAC; Dan Heffernan as head of global agency APAC; Igor Lima as head of global brands, tech, APAC; Kelly Chiu as product marketing manager; Amanda Ang as head of public policy East Asia; Kanishk Khanna as director, media partnerships, APAC; and Monisha Singh as recruitment lead, APAC. In January, it brought on board two senior creative leads - Gareth Leeding and Haran Ramachandran - as it solidifies its commitment to creating best-in-class creative campaigns.
Snap posted revenue of US$1.11 billion for the second quarter this year. While it was a 13% increase compared to the prior year, it missed its previous guidance of 20% to 25%. Snap's net loss was US$422 million compared to US$152 million in the prior year. In May, its shares slipped by over 30% after an earnings warning. This resulted in the shares of other tech giants including Meta and Alphabet falling 9% and 6% respectively.
The company previously explained that platform policy changes have "upended more than a decade of ad industry standards", and macroeconomic challenges have disrupted many of the industry segments that have been most critical to the growing demand for Snap's ad solutions. It has also witnessed increasing competition for ad dollars that are now growing slowly, it previously explained in its investor letter.
Separately, on the product front, it recently launched the Dual Camera feature to allow users to create content using their front and back-facing cameras simultaneously. Users now have the choice of several layouts including vertical, horizontal, picture in picture, and cut out.
Meanwhile, in July, it hosted its first AR Shopping Lunch in Southeast Asia to unveil unique fashion and beauty AR features available on Snapchat. It also showcased its AR glasses. Participating brands included Prada, MAC, Zenni, and FARFETCH, among others.
Tech giants see stocks slide after Snap misses Q2 revenue
Snap SG nabs talent from tech giants Google, Meta, Twitter and TikTok amidst growth spurt
Snap's shares plunge 30% as economic outlook 'deteriorates', takes down tech giants with it
Snap and Live Nation tie-up for AR concert experiences