Snap has issued a profit warning, saying it will cut back on hiring and spending, part of a larger trend of social media companies struggling to adapt to a changing digital advertising market, The Wall Street Journal (WSJ) reported.
“There is a lot to deal with in the macro-environment today,” CEO Evan Spiegel said, per the report, adding that conditions had deteriorated “further and faster” than anticipated since Snap issued its guidance for the quarter.
And in a memo to staff, Spiegel said “while our revenue continues to grow year over year, it is growing more slowly than we expected at this time,” the report stated.
Snap said revenue and adjusted earnings before interest, taxes, depreciation and amortization would likely come in below the projection it published just weeks ago. Snap’s decision follows similar hiring moves by rivals Meta and Twitter, according to the report.
Twitter, in particular, is freezing new hiring and cutting spending as the platform begins reworking its business strategies in the face of a takeover by Elon Musk, a deal that is now on hold.
In a memo to workers earlier this month, Twitter Chief Technology Officer Parag Agrawal said no layoffs are planned.
“It’s critical to have the right leaders at the right time,” Agrawal said in the memo.
He also said Twitter has invested “aggressively” in growth since the pandemic began, but “did not hit intermediate milestones that enable confidence in these goals.”
Last year, Snap reported its shares had dropped after it said its quarterly growth might be hampered due to Apple’s privacy changes. Those changes were made to Apple’s App Store and have challenged companies in terms of managing ad campaigns.