21 ms·
Snap lays off 20% of employees
- newaccount2021 4y ago
- bombcar 4y ago> Spiegel said the company’s revenue growth had reaccelerated to 8 percent from being flat in late July, suggesting its ads business is starting to rebound. Still, that is a far cry from the more than 40 percent revenue growth Snap was seeing before Russia invaded Ukraine, which it blamed for a slowdown in marketing spend, and the digital ads market started to contract earlier this year. In a filing with the SEC, Snap said it expects the layoffs, which were first reported by The Verge on Tuesday, to save it $500 million in costs annually. I get that Putin is to blame for everything, but this seems a bit of a stretch.
- stu2b50 4y agoI don’t think it’s that far fetched. Because of the war, many if not most international western HQd companies pulled out of Russia - that’s a loss in revenue from that region for all of them. The first thing that goes is marketing spend when you need to reallocate your budget.
- bobthepanda 4y agoI think the bigger culprit would be the massive inflation shock to consumer confidence. Less people buying things equals ads chasing fewer dollars.
- onlyrealcuzzo 4y agoYou really think the war has more to do with it than global governments NOT handing out 50% of global GDP in free money anymore?
- mrhands556 4y ago20% of their employees had salary + benefits of 500 million? Edit: Snapchat has 32k employees!? :o How does Snapchat have 4x the employees that twitter has?
- darth_avocado 4y agoIt’s not just employees that contribute to the cost. They’re essentially shutting down entire businesses, which also come with a lot of operating expenses.
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- aaronbrethorst 4y agoThe very first line of the article includes Snap's headcount: "Snap is laying off around 20 percent of its more than 6,400 employees" Original number of employees: 6,400 Approximate number getting laid off: 1,280
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- conradfr 4y ago> 20 percent of its more than 6,400 employees So ~1280 employees laid off > Snap said it expects the layoffs, which were first reported by The Verge on Tuesday, to save it $500 million in costs annually. So $500M / 1280 = $390,625 per employee per year, ~$32,552 per month, wow.
- myth_drannon 4y agoSnap had very high salaries for engineers. On Blind, many times I saw TC offers of $500K-700k.
- johnwheeler 4y agoThat letter sounds like something you’d read to a group of market analysts—not employees
- ktta 4y agoWould you rather some "Unfortunately, due to market conditions..." fluff like the rest of them?
- johnwheeler 4y agoThat _is_ what is sounds like...
- shp0ngle 4y agoSnapchat had their own TV shows!?
- EddySchauHai 4y agoYeah I saw ads for that recently, a Snap documentary of the life of Bhad Bharbie or something (a female rapper I believe). I don't believe we're talking about TV shows that rival Apple TVs exclusives
- saurik 4y agoNot sure if this is the same kind of content you are talking about, but I rather enjoyed Ryan Reynolds Doesn't Know Anything... though I was in a pretty dark place when it came out so it was probably ironic :(. The issue for Snap, of course, is that I only watched it on YouTube ;P. Here is a link to the first episode: https://youtu.be/MnR4P7205dc https://youtu.be/MnR4P7205dc
- lotsofpulp 4y agoI do not understand how people can stand this type of quick cut content.
- Apocryphon 4y agoI can. There's plenty of videos on YouTube that end up tiring by the end of ten minutes, even if they contain informative or entertaining content. What I do not understand is how they expect whatever revenue they can get from a 6-7 minute video can pay off the cost of bringing in celebrities to star in them.
- spaceman_2020 4y agoEveryone is producing TV shows now. There are 'Amazon Mini Shorts' on my Amazon app, Swiggy and Zomato - two food delivery apps - also have their own shows. It's an explosion of content and I can't fathom who in the world is watching all of it. Or any of it.
- zepppotemkin 4y agoIt's crazy to me that they pretty much doubled their headcount over the pandemic, I know there are economic reasons for some of the recent layoffs but the hiring sprees some companies went out seem crazy to me
- revskill 4y agoNormally they hired talent to prevent talents join competitive companies ?
- azemetre 4y agoI think it may just be taking advantage of the lose monetary policy of the last decade plus. It's easier to justify one-shots, experiments, or new product searches when loans are cheap and aplenty. The money spigot has dried up and you either adapt or die.
- mym1990 4y agoJust curious, are companies like Snap going out an getting massive loans to facilitate hiring?
- colinmhayes 4y agoLooks like snap has $4b in debt, up from around 1 before the pandemic.
- azemetre 4y agoI mean they initially raised ~$5 billion in multiple rounds when first started in 2011. [1] I doubt they could raised an equivalent amount if they started in say 2018 in the current environment. [1] https://www.crunchbase.com/organization/snapchat https://www.crunchbase.com/organization/snapchat Snapchat just recently had its first ever profitable quarter, 2021Q4, since going public. That's a bad look, I also doubt this story will hardly be unique in the upcoming year (more tech layoffs from "unicorns").
- 4y ago
- Brystephor 4y agoEvan also released a report this morning. Some departments such as Snap Minis & games, snap originals, and a few other things like that pixy will be cut heavily/stopped entirely. Team members in the U.S. are stated to receive at least 4 months of "compensation replacement". Those relying on work authorizations will receive additional support and flexibility according to the email. Other notable pieces is that Jerry Hunter is being promoted from SVP of engineering to COO. As a side note: I've had several recruiters reach out to me since yesterday. Yesterday (08/30, day of verge report release) I had 9 unprompted recruiters reach out. Door dash, 2 from Amazon, and a few from some lesser known companies as well. This is with my LinkedIn profile set to "not looking for a job". sources: [1] https://www.axios.com/2022/08/31/snap-restructuring-layoffs https://www.axios.com/2022/08/31/snap-restructuring-layoffs [2] I'm a snap software engineer.
- MuffinFlavored 4y ago> Some departments such as Snap Minis & games, snap originals, and a few other things like that pixy will be cut heavily/stopped entirely. I wonder how much fat is being debated to be trimmed at GOOG/AAPL.
- SteveNuts 4y agoThe Google graveyard will probably double in size
- Brystephor 4y agoI imagine their businesses are more resilient due to more income streams. Snap is pretty dependent on advertising income. I have no idea what Google's dependence on advertising income is, but I'd assume the ratio is less. Apple has multiple sources of income and I would be surprised to see them do layoffs. I'm more curious about other companies such as Meta. Especially since Zuckerberg has openly stated there's probably people who shouldn't be there.
- dmitrygr 4y ago> I have no idea what Google's dependence on advertising income is basically 100%. Cloud makes a little, but mostly it is all paid for by ads
- cfors 4y agoLays off 20% of employees and the stock jumps 9% immediately. Really drives home a good message to all CEO's out there /s
- belval 4y agoTaking your comment in good faith. Snap has a lot of fluff around it that has questionable value (TV Shows, Games). In a recession the investors like to see that fluff gone because it's harder to raise money. Snap with 20% of its employees gone is more valuable because it focuses on the business that actually makes money instead of hopeful moonshots. You most likely wouldn't see a large uptick in value if this was an industrial "value" company.
- FerociousTimes 4y agoCost centers vs revenue centers
- hackitup7 4y agoLayoffs suck but they're done to preserve the value of the overall entity, which includes the benefit of all remaining employees. You cut some jobs but it allows you to keep others.
- rr888 4y agoIts still trading a tiny fraction of what it was a year ago. I dont think anyone would look to SNAP as a good way to run a company.
- rconti 4y agoThe message is not (necessarily) lay off 20%. The message can be "we should not have hired so fast" Or perhaps "take decisive action to respond to market conditions". O Or any number of other messages.
- time_to_smile 4y agoIt's common for stocks to rise after layoffs. Investors already know the company is in bad shape, and the layoffs signal things might be changing. But why in the world is the comment currently being downvoted? Anyone in tech, working for a non-profitable publicly traded company should be ready for layoffs. This will typically happen after earnings (otherwise you signal there is a problem before your investors know the current state of the company which is bad). This is clearly the message being sent by this stock price rise. Everyone can pretend it's just a snap specific problem but this is coming to everyone. edit: to add, if you look at Wayfair stock the day they announced only 5% layoffs, 8/19, their stock dropped considerably. The message from wall street is not "layoffs" but "serious layoffs"
- doublerebel 4y agoDupe from 20 hours ago, 114 points, same article: https://news.ycombinator.com/item?id=32654226 https://news.ycombinator.com/item?id=32654226
- Brystephor 4y agoMaybe this one can be updated with the axios article? https://www.axios.com/2022/08/31/snap-restructuring-layoffs https://www.axios.com/2022/08/31/snap-restructuring-layoffs
- dang 4y agoHmm, believe it or not that one only made the front page for 1 minute. Given that the submission didn't get frontpage attention and that the thread there is rather poor, I think we can let the current post escape the fate of dupeage. I've been working on software to detect such threads (i.e. highly active discussions that are 'underwater') but it's not hooked up yet.
- geerlingguy 4y agoJust wondering behind-the-scenes, is a thread like that flagged or something... or did it just not hit the right metrics at the right time to float up on the front page?
- dang 4y agoNot flagged, but that domain is downweighted, as are most major media/web sites on HN. The downweight is pretty carefully calibrated to allow the (hopefully) most interesting (or at least most upvoted) articles through, but then we get these weird outliers that stay underwater. I'm not so worried about a major news piece (someone else will just repost a different version of the story, as happened here), but sometimes there are really cool and interesting posts that get lots of upvotes and even comments without ever reaching escape velocity. It's a bit Rube Goldbergian but my thought is to have separate software watching for those, and maybe plugging them into the second-chance pool or something (https://news.ycombinator.com/item?id=26998308 https://news.ycombinator.com/item?id=26998308).
- sremani 4y agoLooked at SNAP stock market analysis.. Net Income: -487.96M Public companies that cannot turn profitability will be under microscope during the 'current/coming' recession. Yanking 20% staff is not going to turn SNAP profitable.
- jeffbee 4y agoIf they actually save a net $500 million annually, as they are claiming, then this move will absolutely turn SNAP profitable.
- johannes1234321 4y agoThey don't only reduce cost, but by shutting down products also lose revenue.
- onlyrealcuzzo 4y agoThose products don't make any meaningful amounts of revenue. That's going to be a rounding error.
- johannes1234321 4y agoStill the maths not necessarily goes the way the GP posted. They won't necessarily become net positive.
- onlyrealcuzzo 4y agoIt's more likely they won't become profitable because they overestimated how much they'll save - not because they underestimated how much they'll lose.
- myth_drannon 4y agoWell, they have the financials but the products that were shut down were the most unprofitable ventures?
- ginger2016 4y agoTikTok and Instagram are the hip internet properties where young people share stuff. Snap Chat is essentially a dying service. Evan Spiegel is not a visionary like Zuckerberg, Gates, Bezos, Brin and Page. That said he is smart enough to run Snap which in my opinion is a boutique web site some people find interesting. Snap won’t matter in a few years, it is better to sell it to a bigger social media network.
- psalminen 4y agoI've seen this happening for the last couple years, which is disappointing. It's always been the only social platform I use with frequency, but that's becoming harder with fewer of my peers using it.
- nrmitchi 4y ago> Evan Spiegel is not a visionary like Zuckerberg I'm not here to defend Spiegel, but this sentence kind of reads as a joke based on the amount of "copying Snapchat to put into Instagram" that Facebook spent years doing.
- ginger2016 4y agook, fair. Spiegel came up with some new features for his app which people found interesting, and maybe even copied. That will make him an above average Product Manager, not a visionary leader in the caliber of Zuckerberg, Gates, Bezos, or the Google Duo; all these people are empire builders, they used their initial success acquire/build multiple billion dollar conglomerates that own multiple internet properties. Granted, Spiegel has kept snap some what relevant all these years, but he is not an empire builder, and to be a big player in the social media space you need a leader who is an empire builder.
- nrmitchi 4y ago> they used their initial success acquire/build multiple billion dollar conglomerates Snapchat currently has a market cap of $18B. Snapchat has acquired (at least, from my basic google search) 12 different companies. Your measuring stick here is so extremely off. I not-so-secretly hope Spiegel sees this, has a laugh, and updates his LinkedIn position to "above average Product Manager @ Snapchat"
- jeffbee 4y agoInteresting. Snap is one of the few along with TikTok and Instagram, that are still heavily used by teens, according to recent Pew research. https://www.pewresearch.org/internet/2022/08/10/teens-social-media-and-technology-2022/ https://www.pewresearch.org/internet/2022/08/10/teens-social... A couple days ago they also got Protocol to reprint their press release about cutting cloud expenses: https://www.protocol.com/enterprise/snap-microservices-aws-google-cloud https://www.protocol.com/enterprise/snap-microservices-aws-g... Sounds like they are moving decisively toward profitability instead of growth for growth's sake.
- atyppo 4y agoAnecdotal obviously, but I’m barely outside this demographic at 22. I can tell you that nobody around my age in NYC uses snap anymore. In fact, it’s looked at with shock or disdain if someone mentions that they opened it for one reason or another.
- toomuchtodo 4y agoAnecdotally, what is the app of choice for this cohort if they've moved away from Snap?
- rrrrrrrrrrrryan 4y agoTikTok, presumably?
- sergiomattei 4y agoTikTok isn’t a messaging app, though.
- raydev 4y agoBased on my kids' usage, TikTok is for passive consumption, whereas Snapchat seems to be primarily a messaging service with content as a sideshow. So if Snapchat stopped existing tomorrow they'd probably move to iMessage. Until one of their friends gets an Android.
- berz01 4y agoSpreadsheet warrior kinda shit. CFO needed 500M for a stock-buyback. CFO wrote down some napkin math, let go 1/5 of the team. Murdered all innovation into the ground. Wallstreet loved it. Snapchat is a cashcow on a spreadsheet. CFO knows he needs another 20% layoff in Q1 of 2023 to drive his cost of capital down further. Expect more pain from the suits.
- ginger2016 4y agoAre they doing a buy back? Didn’t Steve Jobs say trading cash by buying back stock the worst idea ever?
- advisedwang 4y agohttps://techstory.in/snapchat-announces-a-new-500-million-share-buyback-plan/ https://techstory.in/snapchat-announces-a-new-500-million-sh... Both of these take a few months to plan, so from the timing of that story they must have been planning them simultaniously.
- ssharp 4y agoFor Snap? Probably. For Apple? Steve Jobs was never sitting on $100+ billion in cash. Though, Apple's buy backs + dividends made more sense given how profitable they were and how much cash they had on hand. Snap has never had positive operating income.
- htrp 4y agoDepends on when the options of the executive team were issued..... and whether a buyback gets them back into the money?
- treis 4y agoI think it's just really hard for a company to keep innovating like that. Once you get to a certain size about the best you can do is refinement on your existing product or muscle into adjacent products.
- maerF0x0 4y agobut the stock jumped 9% so wouldnt that be counter productive for buyback? (ie now you get less consolidation of ownership than before)
- blantonl 4y agoI'll never understand the reasoning for social media platforms to get into the hardware business. SNAP getting into drones and phones - you might as well just light stacks of money on fire, which is what happened here. Whatever happened to just doing what you are good at? Or is the end result for every startup global world domination?
- afavour 4y agoThe answer is lock-in. Once someone has spent $100s on some hardware that only works with your network it’s less likely they’ll switch. Also control of the market. Some people said Google was insane to buy Android when they did but now they’re one of two players in the smartphone market. Meta would dearly, dearly like to have that kind of control (hence, IMO, the oversize focus on the metaverse)
- adrr 4y agoWhat is snap good at? What is their moat? Hardware is a logical step for companies looking to not put their eggs all in one basket. Amazon has Kindles, Echo, Ring etc. Google has Nest, Pixel Phone. Microsoft has their laptops
- asdajksah2123 4y agoTheir moat is Apple/Google promotion while they are the only Meta alternative. TikTok eats into that but not much because of the geopolitical issues surrounding it.
- junipertea 4y agoI think hardware is not a reason for their current downfall. Going into hardware is away to diversify and avoid the problems they are facing right now: TikTok.
- phone8675309 4y agoGrowth must be eternal, regardless of how unsustainable, or Wall Street will decapitate you. The bankers thirst for profit must be slaked. If this means burning giant piles of (other people's) money to maybe have a 2% better rate of return next year then you do it.
- Ivovosk 4y agoIt was about time they started thinking as a public company. Looking after shareholders value (s)
- jedberg 4y agoInterestingly NFLX is up today on this news, partly because one piece of this is two of SNAPs ad execs are moving to NFLX.
- maerF0x0 4y agoand some amount less competition for original content
- gregdoesit 4y agoBuried in the announcement is how Snap is shutting down Zenly and firing everyone who worked on it in Paris, France. Zenly is a location-based social application (think: you can see & connect with your friends on a map). Snap bought them in 2017 for a reported $250-350M when they had ~4M installs. Now Zenly is at 40M MAUs, growing strong as I heard from employees working there. Zenly is (was?) popular in Japan, Southeast Asia, Eastern Europe and the Nordics. In Japan, it is head-on-head as the most used social app with Line. I find it odd that Snap just shuts down an app that was so popular in regions that is hard to gain foothold for any social media team. They could have likely sold it or spun it out, but chose not do so. It's also not like the app is a major cost to the company. Less than 100 people work on it across Snap, most based in Paris, France.
- derefr 4y ago> They could have likely sold it or spun it out, but did not do so. Doing either would have required de-acquiring the team that develops and runs it. Whereas I assume the whole point of acquiring Zenly was to acquihire those folks to work on Snap (and likely then lay off the now-redundant engineers previously working on Snap’s geo features.)
- jollybean 4y ago$300M is too much for an acquire unless they are super AI scientists who have know-how that's worth a few billion. $30M - maybe. If they have 30 person team and they are really good. I remember that deal and it stunk. It feels like one of those pilfering Private Equity deals where someone is getting payback for something or the other.
- mathverse 4y agoObviously I cannot be familiar with every app under the sun but Snapchat, given its size and brand struck me as one of those companies that should be used all around the world. But I have not seen anyone using it or talking about it in Europe. Always thought it's mostly a US thing.
- hellomyguys 4y agoSnapchat has 86m DAU in Europe vs 99m in North America. Definitely big in many demos in Europe.
- wellthisisgreat 4y agoLooking at the posters of the shows I can't see how canceling those is a bad thing for anyone except people who's salaries depended on it
- Gasp0de 4y agoWhen I read the headline I thought "Wait, Snap is developed by an own company and not canonical? I'm glad it's not that snap thats downsizing :D
- seydor 4y agoA lot of people would like to see snap downsized entirely
- m1117 4y agoSnap!
- modeless 4y agoDoes cutting "Games" mean PlayCanvas too? That would be a shame. For those who haven't heard of it, PlayCanvas is a game engine and editor akin to Unity, but web-based (both editor and games). Acquired by Snap a few years ago. Here's an example game: https://venge.io/ https://venge.io/