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Snapchat plans to slow hiring

Evan Spiegel, CEO of the company that owns Snapchat, told employees that the company is slowing hiring significantly for the rest of the year after warning investors that its revenue will not grow as quickly as expected.

Snap noted that the economy worsened faster than expected last month. The social media company cut its quarterly forecast, which led to a massive sell-off of its shares.

"The macroeconomic environment has deteriorated more and faster than expected since late April," the company said in a report to the Securities and Exchange Commission. As a result, we believe we are likely to report revenue below the lower bound of our guidance range for the second quarter of 2022.

This led to Snap’s share price dropping to the lowest level we haven’t seen since mid-2020, as it fell by 31%. Nasdaq futures also fell, and traders blamed Snap Inc.

US stocks closed higher on Monday, led by gains from banking and technology. But the rally comes after the longest series of weekly declines on Wall Street since the dotcom bubble collapsed more than 20 years ago, and many investors remain wary.

Snapchat warns of slow revenue growth

Spiegel told employees that the company has been slowing hiring for this year with an extensive list of problems.

“We continue to face – like many businesses – rising inflation and interest rates, supply chain shortages and employment disruptions, platform policy changes, the impact of the war in Ukraine, and more,” he wrote.

Snapchat last month forecast revenue growth in the second quarter of 20% to 25% over the previous year.

The news follows statements by companies, including Meta and Uber, earlier this month that they plan to reduce costs and hiring.

Spiegel said Snape is evaluating the rest of this year's budget. Managers were asked to review spending to find additional cost savings.

He explained that some of the planned recruitment has been postponed to next year. This came even though the company still expects to employ more than 500 people by the end of this year. compared to 2,000 new people hired in the last 12 months.