The company has announced its plans to increase focus on three new strategic priorities: community growth, revenue growth and augmented reality. (RA). The firm has also highlighted its path to profitability and has provided preliminary results.
Snap has claimed that current revenue growth in the quarter to date is about 8% year-over-year, which is well below the company’s expectations, according to a memo that CEO Evan Spiegel sent to employees on Tuesday.
“Although we have built significant capital reserves and have gone to great lengths to avoid reductions in the size of our team by reducing spending in other areas, we must now deal with the consequences of our lower revenue growth and adapt to the market environment.” commented Spiegel.
In Wednesday’s investor update, Snap said it will substantially reduce or completely eliminate any investment that is not directly related to the company’s three strategic priorities. Some areas where they will be cut include Snap Originals, games, hardware (Spectacles), and other standalone apps.
The company will increase its focus in several areas to create a clear path to profitability and free cash flow. Snap’s plans include the aforementioned 20% workforce reduction, efficient scaling of infrastructure costs, investments in content that drive community engagement, reduced marketing investments, and a reduction in costs. general real estate expenses.
Snap expects these strategic actions to result in an estimated $500 million reduction in its annualized cash cost structure relative to the second quarter. In addition, he has pointed out that completed the buyback $500 million which it announced alongside its second-quarter earnings report. The company repurchased 3.1% of the outstanding shares at an average price of US$9.75.
Source: Ambito
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