Snap's stock plunged by as much as 30 percent in after hours trading after the company said revenue in the final quarter of 2023 rose by five percent year on year, which was lower than analysts expectations.
In recent years, the company has been at pains to compete for ad revenue against Meta's Instagram, Google-owned YouTube and TikTok.
Its revenue growth in the October to December period again trailed that of Meta and Google which last week posted double digit ad sales growth for the same quarter.
After its launch in 2011, Snapchat became a hit, particularly with young smartphone users, by letting people share photos or videos in messages that self-destruct after being viewed.
It also innovated with the use of filters for shared content, but an expansion into hardware such as drones and eyeglasses has failed to gain traction.
The company said daily active users for the current quarter would edge higher to 420 million after ten percent growth last year.
Snapchat+, the company's AI-amped subscription service, reached over 7 million subscribers.
Earlier this week Snap said it was letting go ten percent of its staff, including members of its senior management team.
"We are reorganizing our team to reduce hierarchy and promote in-person collaboration," a Snap spokesperson said.
Snap's net loss for the quarter stood at $248.2 million, which was 14 percent lower than a year before.
Its full year loss for 2023 was $1.4 billion.
Snap lets go ten percent of staff
San Francisco (AFP) Feb 5, 2024 -
Social media company Snap, which runs the youth-focused Snapchat platform, on Monday said it was laying off about ten percent of its staff, joining a wave of job cuts in the tech sector.
One day before it was due to announce its latest quarterly earnings, the company said that "approximately" ten percent of its global staff would be let go.
"We are reorganizing our team to reduce hierarchy and promote in-person collaboration," a Snap spokesperson said.
"We are focused on supporting our departing team members and we are very grateful for their hard work and many contributions to Snap," the company added.
The company had slightly more than 5,300 employees at the start of November last year, the company said.
Snap had previously cut 20 percent of its staff in 2022.
In recent years, the company has been at pains to compete for ad revenue against Meta's Instagram, Google-owned YouTube and TikTok.
After its launch in 2011, Snapchat became a hit, particularly with young smartphone users, by letting people share moments in the form of photos or videos in messages that self-destruct after being viewed.
It also innovated with the use of filters for shared content, but an expansion into hardware such as drones and eyeglasses has failed to gain traction.
According to website layoffs.ai, which tracks the industry, so far 32,000 jobs have been lost since January 1 in the tech sector.
The cuts are not on the same scale as late 2022 and early 2023 when tech companies got rid of hundreds of thousands.
That was blowback from the hiring frenzy during the pandemic, when companies ramped up employee counts as everyday life turned online.
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