Snap will miss its revenue and earnings targets in the current quarter, CEO Evan Speigel has warned .
Snap shares plunged 40% after CEO Evan Spiegel warned in a note to employees that the tech company will miss its revenue and profit targets in the current quarter.
The company will also reduce hiring through the end of the year as it seeks to manage expenses, Spiegel wrote. Part of the letter was filed with the Securities and Exchange Commission.
“Today we file an 8-K, sharing that the macro environment has deteriorated faster and faster than we anticipated when we issued our quarterly guidance last month,” Spiegel wrote in the note. “As a result, while our revenues continue to grow year over year, they do so more slowly than we expected at this time.”
Snap crashes on Wall Street
In April, Snap reported that they missed Wall Street ‘s sales and earnings expectations . At the time, the company said it expected 20% to 25% year-over-year growth in revenue.
Additionally, Spiegel blamed the economy for the company’s losses. “Like many businesses, we continue to grapple with rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more.” “said the CEO of Snap.
The company also plans to slow down its hiring for the rest of the year. Snap plans to hire 500 more people this year, up from the 2,000 new people it hired in the last 12 months. “We will also be evaluating the remainder of our 2022 budgets and leaders have been asked to review spending for additional cost savings,” the company memo said.