Snapchat is set to ‘substantially lower’ its marketing spend and cut 20% of its workforce as the brand looks to restructure its business.
In an open letter to the snap team, Snap Inc CEO Evan Spiegel addressed the fact that the company’s year-over-year QTD revenue growth of 8% is ‘well below’ what the brand was expecting earlier this year.
“For planning purposes we have modelled a range of outcomes, some of which assume that low revenue growth continues into next year, and we have built our 2023 plan to generate free cash flow even in a low growth scenario,” Speigel continued.
The business has said it must reduce its ‘cost structure’ by lowering its marketing spend and reducing the size of its team ‘by approximately 20%’.
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As part of the reform, Snap has attained the services of Google vice-president and UK and Ireland managing director Ronan Harris who will become the new EMEA president.
The brand will also increase focus on three strategic priorities, including community growth, revenue growth, and augmented reality.
The CEO concluded: “While we have built substantial capital reserves, and have made extensive efforts to avoid reductions in the size of our team by reducing spend in other areas, we must now face the consequences of our lower revenue growth and adapt to the market environment.”
“Changes of this magnitude are never easy, and we must act decisively to meet this moment as a team.”
The news comes months after Snapchat announced that it had partnered with sports media agency COPA90 to deliver a new content partnership for the 2022 Women’s Euro.
