Snap CEO Evan Spiegel has announced a restructuring of its ad business to its team.
In a note to staff yesterday, Spiegel pointed to a lower than expected rate of revenue growth and “limited” forward-looking revenue visibility prompting the necessity to reduce its cost structure to avoid losses.
“The investments we have made in our business to-date assumed a higher rate of revenue growth based on our vast opportunity and our proven history of execution, including 2x growth in the size of the Snapchat community and 10x growth in trailing twelve month revenue since our IPO in 2017,” Spiegel said.
The restructure will focus on Snap’s three strategic priorities: community growth, revenue growth and augmented reality (AR), Spiegel said, with projects not directly attributed to these areas being stalled or substantially reduced in investment.
Discontinued investments include Snap Originals, Minis, Games and Pixy, while the organisation has started to wind down its Zenly and Voisey applications.
Staff shuffle with promotions, losses and new faces from Google
Spiegel also announced the reduction of Snap’s team by 20%, but added that staff numbers would remain larger than at this time last year, and engineering, sales and product teams are being reorganised.
New President roles are being created in the Americas, EMEA and APAC regions, with Ronan Harris, Vice President and Managing Director of UK & Ireland at Google joining Snap to take the helm in EMEA in October.
The changes also mean promotion for Senior Vice President of Engineering, Jerry Hunter to Chief Operating Officer, effective immediately. Hunter will be leading monetisation efforts across EMEA, APAC and the Americas, alongside running Growth, Partnership and Content and AR Enterprise teams.
The news follows the confirmation that Snap executives Jeremi Gorman and Peter Naylor are leaving to lead Netflix’s new ad business next month.