(New York) The general manager of Snap, the parent company of the Snapchat application, announced on Wednesday a restructuring of the group, leading to the elimination of approximately 20% of the workforce, or more than 1,200 employees.
Posted at 10:29
Updated at 11:40 a.m.
“We are restructuring our business to increase our focus on three strategic priorities: growing our community, growing our revenue and augmented reality,” Evan Spiegel wrote in a memo sent to employees.
“Projects that do not contribute directly to these sectors will be stopped or receive considerably less investment,” added the co-founder of Snap.
The job cuts were revealed on Tuesday by the specialized site The Verge. At the end of June, Snap, which is headquartered in California, had just over 6,400 employees worldwide.
Projects like Snap Originals (exclusive series), Minis (integration of third-party applications), Games (mobile games) and Pixy (miniature drone) will be discontinued as part of the group’s reorganization, Spiegel said.
The geolocation applications Zenly and music creation Voisey, acquired through takeovers, will see their activity gradually reduced.
When publishing its quarterly results at the end of July, the group had already warned that the growth of its turnover was slowing down and would therefore have to reduce its expenses. The title then collapsed by almost 40% on the New York Stock Exchange.
Like other social networks, Snap is suffering from a general reduction in advertising spending by advertisers, its livelihood, as well as an Apple regulatory change requiring users to obtain consent before tracking them. for advertising targeting purposes.
The group also faces rivals popular with younger audiences, including the short video sharing platform TikTok.
Mr Spiegel said the figure of 8% quarterly revenue growth from 2021 is “well below what we expected earlier in the year”. “Still, I wouldn’t underestimate Evan Spiegel,” Jasmine Enberg of Insider Intelligence commented in a note.
“Snap continues to have a growing and loyal user base and is well positioned to capitalize on its augmented reality offering for advertising and commerce over the long term,” the analyst added.
Snap also announced on Wednesday the promotion of deputy general manager of engineering Jerry Hunter to chief operating officer. Ronan Harris, a Google executive, has been hired as president of the Europe, Middle East and Africa region and will start in October.
The restructuring was welcomed on Wall Street, where Snap’s stock rose nearly 8% after dropping about 4% at the close on Tuesday.