Snap is the latest tech giant to join The Great Hunkering Down. Like other social media companies that flourished during lockdown, the company is struggling to meet earnings estimates and will slow hiring.
Snap CEO Evan Spiegel wrote in a note to employees on Monday that Snapchat's parent company would slow hiring through the end of the year on the heels of missing both revenue and earnings estimates. The earnings miss was first reported by CNBC and based on a letter Snap filed with the Securities and Exchange Commission.
“Today we filed an 8-K, sharing that the macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month,” Spiegel wrote in the note that was obtained by The Verge. “As a result, while our revenue continues to grow year-over-year, it is growing more slowly than we expected at this time.”
Spiegel denied both layoffs and a hiring freeze.
“We will continue to hire new team members, including recruiting for open roles,” he said. The company will hire just 500 more workers this year, a significant reduction from the 2,000 recruits it added in the last year. Across the tech sector, recruiting for engineers still appears strong, although experts say compensation might suffer in the near future.
Snap joins Meta, Nvidia, Salesforce, Coinbase and other tech giants that have slowed or frozen hiring after disappointing earnings reports. Smaller companies and startups that flourished during the pandemic, including Carvana, Mural, Klarna and Cameo let go entire teams of employees, mostly via video calls since employees are still remote.
Snap’s reasoning for pulling back on hiring and cutting other expenses mirrors that of most of the other tech giants: rising inflation, rising interest rates, supply chain, the war in Ukraine, and Apple’s new ad-tracking policies. Apple's policies, which make it difficult for companies to target ads to users across their iPhone apps, have also hit Meta hard this year. The company said it would slow hiring.