Snap is laying off 100 employees mostly in advertising and sales
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Re: Snap is laying off 100 employees mostly in advertising and sales
#2Growth rarely lasts forever, and Snap had more employees than generally considered reasonable with such a single-purpose app. I'm surprised they aren't laying off more engineers though, personally.
Re: Snap is laying off 100 employees mostly in advertising and sales
#3Growth rarely lasts forever, and Snap had more employees than generally considered reasonable with such a single-purpose app. I'm surprised they aren't laying off more engineers though, personally.
they still need them to make a ui change that users might actually like.
Re: Snap is laying off 100 employees mostly in advertising and sales
#4Growth rarely lasts forever, and Snap had more employees than generally considered reasonable with such a single-purpose app. I'm surprised they aren't laying off more engineers though, personally.
I think they already had a round of layoffs focused on engineers.
Re: Snap is laying off 100 employees mostly in advertising and sales
#5It’s rarely one layoff once the momentum stops. Companies usually do the first one or two thoughtfully with good packages, but eventually it turns into just another tool for management. The irony is that management research suggests that cutting work is where the benefits come from - just cutting the people doesn’t help.
Re: Snap is laying off 100 employees mostly in advertising and sales
#6I wonder how many hundreds of millions of dollars the mistake of signing that $2 billion Google Cloud deal [1] has cost them unnecessarily and how many jobs are going to get cut as an ultimate consequence.
Their SG&A expense line was ~$450 million the last three quarters of 2017, up from $182 million in Q4 of 2016.
Daily active users only increased from 158m to 187m in that time, which should have prompted a very modest cost increase in their operating results. They added upwards of $800 million in new annual expenses that should have never been stapled on to the business. Reducing that back to where it was, would still leave them burning $150m or so per quarter in net income (maybe $100m in cash per quarter) in 2018 assuming sales hold up, but it'd be a lot closer to manageable. As it is, they're massively bleeding red ink.
Free cash flow was around negative $800m the last four quarters. Their cash went from ~$3.2 billion to $2 billion in 2017. It looks like that will be down to ~$1.2 billion by the end of 2018.
[1] http://fortune.com/2017/02/02/snap-will-spend-on-google-clou...
Re: Snap is laying off 100 employees mostly in advertising and sales
#7Anecdata, but in my group people are using Snap less and less. Meanwhile I see more and more Instagram stories each week.
It's sad for the employees affected, but this could be a wake up call to Snap. I like the premise of Snapchat, that messages are ephemeral, but it seems like Snap the company doesn't realize that people don't use their app for sponsored stories. It's primarily a messaging tool for friends.
Re: Snap is laying off 100 employees mostly in advertising and sales
#8Growth rarely lasts forever, and Snap had more employees than generally considered reasonable with such a single-purpose app. I'm surprised they aren't laying off more engineers though, personally.
I think they already had a round of layoffs focused on engineers.
It says in the article they did, yeah. Still a bizarre amount left in my opinion. I can't imagine what they do all day.
Re: Snap is laying off 100 employees mostly in advertising and sales
#9This seems particularly alarming for Snap - they badly need a coherent go to market strategy and client relationships.
IMO They need to work hard on a clear business model and ramp up sales against that, not fire the sales people for terrible strategy...
Re: Snap is laying off 100 employees mostly in advertising and sales
#10This seems particularly alarming for Snap - they badly need a coherent go to market strategy and client relationships. IMO They need to work hard on a clear business model and ramp up sales against that, not fire the sales people for terrible strategy...
How should we view these layoffs in comparison to say the ones done by twitter? They did a bunch of layoffs a year or so ago and it’s market cap has recovered significantly since then.
The first wave of layoffs Snap did were related to the hw engineering org. AKA those glasses they mad, right? They were a commercial failure and a distraction so I viewed that as largely a positive sign.
This wave of layoffs seems like they are trimming the fat in sales/marketing, again not necessarily a bad thing. Other companies like twitter have done this and gone on to recover.
I think the biggest problem with Snap right now is how similar it is to Instagram now that Instagram has cloned stories. Twitter served a far different use case from Facebook and they seem pretty safe now that FB is backing away from news.