Snap has announced a major restructure of its business, which will see it cut 20 per cent of its workforce – around 1,200 employees – and focus on three strategic priorities: community growth; revenue growth; and augmented reality. In a note sent to all employees yesterday, Snap CEO Evan Spiegel wrote that projects that don’t directly contribute to these areas will be discontinued or receive substantially reduced investment. He also confirmed that the company would no longer invest in Snap Originals, Minis, Games, and it’s selfie-taking drone, Pixy, and that it has started the process of winding down standalone applications, Zenly and Voisey.
In the last 12 months, the company’s valuation has slumped from $130bn (£112bn) to around $20bn today.
Explaining the rationale behind the job cuts, Spiegel wrote: “Our current year-over-year QTD revenue growth of 8 per cent is well below what we were expecting earlier this year…Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses. While we have built substantial capital reserves, and have made extensive efforts to avoid reductions in the size of our team by reducing spend in other areas, we must now face the consequences of our lower revenue growth and adapt to the market environment.”
As part of the restructure, Snap has promoted Jerry Hunter to the role of Chief Operating Officer, and is also realigning its regional operational leadership by creating a new President role in each of the Americas, EMEA and APAC regions. 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. Ronan Harris, Vice President and Managing Director of UK & Ireland at Google, is joining Snap as President, EMEA, in October, while Snap is currently recruiting for the roles of President in the APAC and Americas regions.