Snap is cutting staff numbers deeper than expected as some of its senior advertising executives jump to Netflix.
The social media platform reportedly plans to cut one in five of its 6,400 employees following “more challenging than we expected” June quarter result.
Jeremi Gorman, Snap’s chief business officer, is reportedly leaving with Peter Naylor, Snap’s vice president of ad sales for the Americas.
Gorman will be president of advertising and Naylor VP, advertising sales.
This gives Netflix, which is working on an advertising-supported tier to its subscriptions, deep experience in the ad business.
Snap is taking a hard look at how to better drive productivity: “This will include a substantially reduced rate of hiring and a strict reprioritisation of goals and initiatives across the company.”
Digital media platforms have taken a beating following reports brands may already be pulling the plug on advertising.
The run started with Snap’s results and downgrade of its outlook for the September quarter.
Meta and Google have slowed hiring and are looking at cost cuts.
At Snap, Gorman told an analyst briefing for the June quarter results: “We're looking at macro pressures from a litany of different angles.
“We're hearing supply chain pressure, inflationary costs, of course, that are impacting unit economics as it pertains to moving product.
“They're getting pressure from the cost of capital … being more expensive, as well as drying up in different areas. So insofar as any of those are transitory, I think that's yet to play out in the overall macro.
“But what we're hearing from advertisers, I think, more specifically as it pertains to advertising budgets is … that they are taking this time, given all of those other macro pressures, to reevaluate their priorities to ensure that they're making the right investments in the right places.
“And when we talk about digital advertising, it is the easiest thing to turn off.”
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