Snap plans to slow recruitment, warns revenue will grow slower than expected

Snap CEO Evan Spiegel told employees Monday that the company would significantly delay hiring for the rest of the year after warning investors that revenues would not grow as quickly as expected.

“Like many companies, we are still dealing with rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine and more,” Spiegel wrote in a memo to workers sent by The edge† He went on to say Snap expects to report revenue below the low end of the guidance it gave investors for the current quarter. That news was also announced in a filing with the SEC pushing Snap’s stock price to a low it hasn’t seen since mid-2020.

Like its bigger social media competitor, Meta, Snap plans not to hire any staff for the rest of the year, though Spiegel said the company will continue to recruit for positions already on the list. He said Snap plans to hire an additional 500 people this year compared to the 2,000 it has hired in the past 12 months. In addition, he said executives have been asked to “review spending to find additional cost savings.”

Here’s Spiegel’s full Monday’s memo to employees:


Team,

Thank you for your hard work in this challenging macroeconomic environment. Like many companies, we are still dealing with rising inflation and interest rates, supply chain shortages and labor outages, platform policy changes, the impact of the war in Ukraine and more.

Today we filed an 8-K, sharing that the macro environment has deteriorated further and faster than we anticipated when we released our quarterly guidance last month. As a result, while our revenue continues to grow year-on-year, it is growing more slowly than we currently expected. We think it’s now likely that we’ll report revenue and adjusted EBITDA below the lower end of the forecast we’ve given for this quarter.

We believe that the progress we have made in increasing our sales, combined with the strength of our balance sheet, has positioned us well for the current environment. The foundations of our company remain strong, our community is growing and engaged, and we are excited about the many opportunities ahead. As a result, 2022 remains an important investment year for Snap, despite continued market volatility.

Responsible management of our expenses allows us to invest during this period and emerge stronger as a company. Going forward, we will take steps to re-prioritize our investments – continue to invest in all of our business priorities, but in many cases at a slower pace than we had planned given the work environment.

We will continue to hire new team members, including recruitment for open positions.

We will slow the pace of hiring for vacant positions for the remainder of the year and push some of our planned hires to next year.

We expect to hire more than 500 new team members between now and the end of the year, representing nearly 10% headcount growth across the company over the next seven months. This is in addition to the more than 900 offers already accepted this year, a 41% year-over-year increase, and the approximately 2,000 people added to our team in the ensuing 12 months.

We will continue to fill existing positions that become available as a result of churn if those roles remain a high priority for our teams.

We will also be reviewing the rest of our 2022 budgets and leaders have been asked to review spending to find additional cost savings.

Our most meaningful gains in the coming months will be the result of improved productivity from our existing team members, as we work together to help our new team members get to know Snap and learn how to contribute to their full potential.

Thank you so much for all your hard work and dedication to our community and partners. Through the many ups and downs of the past decade, you have made it clear that you can see beyond the short term and invest in our long term success.

evan