Snap closes offices, falls on the stock market and relies on teleworking

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Snap Inc. is in bad shape. Despite surprising and encouraging results at the start of the year, it’s been a cold shower for several months for Snapchat’s parent company. While its growth is far too slow and its stock market collapses, Snap Inc. closes its offices in San Francisco.

Snap Inc. has seen better days

Last week, Snap Inc. reported its results for the third quarter of 2022. And they’re not good. Indeed, the parent company of Snapchat lost $360 million this year and sees its turnover increase by only 6%… Where the market was aiming for an increase of 8%. Wall Street then hastened to sanction the company and it hurts. Very bad. Snap Inc. shares plummet more than 30%. In one year, it has lost nearly 90% of its valuation.

Faced with ever tougher competition and increasingly skittish advertisers regarding ad spend, Snap Inc. has seen better days. However, Snapchat records a daily user increase of 19%. A figure which is not sensational but which is in the average of the past years. But an increase in users is not enough.

Already last August, the company announced that it wanted to reduce its expenses to deal with this bad patch. This translates into the desire to cut 20% of its workforce. The following month, Snap Inc. then bid farewell to Zenly and its 70 employees. After launching Pixy, a mini-drone for selfies, earlier this year, Snap Inc. opted to scrap that idea in August to focus on stopping that bleeding.

Today, the parent company of Snapchat has chosen to give up its offices in San Francisco and fully rely on telecommuting. Unlike other tech giants that ask their employees to come at least a few days a week, like Apple, Snap Inc. leaves some flexibility to its employees. Which is a good initiative, especially since employees can access a coworking space if they wish. If, in addition, it saves money, the company would be wrong to deprive itself.

But that will surely not be enough to raise the bar. Until the end of the year, the watchword is to limit the broken pots at Snap Inc. and not to fall below the bar of 10 billion dollars in valuation. It remains to be seen what the future holds for Snapchat’s parent company.

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