Dive Brief:
- Snap Inc., parent company of Snapchat, laid off 18 employees from its recruiting division late last week, Variety reports. CEO Evan Spiegel also emailed employees with the news that hiring would slow down for 2018. After tripling its headcount last year, the company had more than 1,800 staffers by the end of 2016. The latest estimate puts that number at about 2,800.
- Even though the company’s daily user rolls have grown to 173 million, Variety says that fell short of analysts' projections, resulting in a downturn in its stock price during August. Now trading at $15.50, Snap is still $1.50 below its initial public offering (IPO) pricing. Losses in the first and second quarter contributed to the decline.
- Last week's announcement follows a previous round of layoffs last month, involving about a dozen members of the team who helped develop the company’s Spectacles wearable product, Variety reports.
Dive Insight:
It's been a wake-up call on several fronts for nascent Snap Inc. since the company's IPO back in March. Snap has struggled to appease the concerns of investors on Wall Street, and it has been accused of illicit recruiting practices by at least one former employee.
The company has stated that its hiring slowdown is a means of cost control, as well as a move to appease worried investors and shareholders. But the optics are discouraging from a recruiting perspective, especially as the majority of companies in the tech space are scrambling to find qualified candidates, with more job growth reportedly on the way.
Snap’s experience in the wearables market and on Wall Street are likely to be factors in its hiring decisions going forward. Other tech firms have had to reckon with talent grabs from the likes of Google, especially for those in very specialized fields like artificial intelligence.
