Dallas The photo messenger service Snapchat is recording historically low sales growth for the company and is therefore taking the axe to jobs. The increase in sales in the third quarter, at eight percent so far, is probably the smallest increase in the company’s history since the IPO in 2017, if the trend should continue, Evan Spiegel, head of Snapchat parent company Snap, said in a public message to employees.
The California–based network – known for deleting messages and photos after receiving them – had experienced rapid growth in the past. But that has changed. Snap now wants to cut a fifth of the jobs and restructure its advertising department. At the end of 2021, the Internet company employed over 5,600 people.
Advertising spending is falling in the face of rising inflation, rising interest rates and concerns about an economic downturn – this affects the Snap group, which relies on advertising revenue. The advertising business also accounts for a large part of the revenues of other Internet giants, which is why Snap is considered one of the indicators of the development of the industry. Snap must adapt to the new market environment, warned Spiegel.