Senior Vice President of Engineering Jerry Hunter will be promoted to chief operating officer and will be responsible for improving coordination between engineering, ad sales and product teams, Spiegel said. 'Face the consequences'ĭespite reducing spending in some areas, Snap must now "face the consequences of our lower revenue growth and adapt to the market environment," CEO Spiegel wrote in the memo. "Snap is clearly going through a tough time," Enberg said. Gorman and Naylor's departures come after Snap reported a disappointing second quarter and it is facing more competition from TikTok, she said. Gorman, a longtime advertising executive who previously worked at Amazon, was instrumental in building Snap's ad business, said Jasmine Enberg, principal analyst at research firm Insider Intelligence. Two of Snap's top ad sales executives, Chief Business Officer Jeremi Gorman and Vice President of ad sales Peter Naylor, are leaving to join Netflix Inc and build the streaming service's ad business. If that growth rate holds, it would be the slowest revenue growth Snap has had since becoming a public company in 2017 a far cry from triple-digit growth rates it has recorded in previous quarters.
Revenue growth so far in the third quarter is up by 8 per cent over the previous year, which is "well below what we were expecting," Chief Executive Evan Spiegel wrote in a memo to employees that was also released publicly on Wednesday. Shares of the Santa Monica, California-based Snap closed down 2.5 per cent at $10 on Tuesday after The Verge first reported Snap's plans for layoffs, and AdAge reported the departure of two top advertising executives.
Snap's warning in May that it would miss its revenue targets due to worsening economic conditions sparked a sell-off of social media stocks. Investors have viewed Snap as an early indicator for trends affecting other social media platforms, as Snap is usually first to report quarterly earnings or provide business updates. The company said it will focus on improving sales and the number of Snapchat users.
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