Snapchat (NASDAQ:SNAP 18.11 1.23%) confirmed on Thursday via CNBC?its promises to eliminate “around 120” jobs off their engineering department. Jerry Hunter, head of Snapchat Engineering said inside a letter to employees, “We are carrying this out after the thoughtful and respectful overview of each team member along with appreciation to your many contributions they already have made to Snap.” Vehicles mentioned the escalating complexity of development , “We will will organize around our key priorities, specifically, addressing the technical debt that we have accrued in the past in order that we can easily build a merchandise that engages customers..” Interesting to observe the idea of “technical debt we\’ve accrued..”.?Is in reference to the broken camera driver for Android phones??Link
Snap prices slid during trading hours following announcement on Wednesday and bottom around $17.58 on Thursday. I thought this was coming off a 50 day most of $20.42 on Feb 16th. Trading price recovered slightly to $17.89 with the closing bell Friday with simply 18 million shares traded down from a standard daily number of 28 million shares.
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Headcount reductions by Snapchat come for an interesting time
The announcement comes amid harsh?criticisms of Snapchat’s recent GUI redesign that saw the app get a major overhaul for Android and iPhone users. While opinions are varied overall feedback is harsh. There\’s even just a serious Change.Org?petition?along with 1.2 MILLION signatures petitioning the fact that social websites giant revert to its previous ui! Its pretty obvious that your overhaul isn\’t being received well in the majority of circles. Its unknown if these layoffs were planned just after conception on the update or if this is usually a reactionary leave fault Snapchat. Its important to note how the firings counseled me from engineering and none stated to generally be utilizing departments. With a reported ~3,069 total employee headcount these layoffs represent in regards to 4% decline in its total workforce.
However there\’s some good news coming out of the Venice, California outfit. The all important advertising and marketing metric, “Daily Active User” saw Snapchat grow in Q4 by using a whopping 9 million users everyday. Now in a total of 187 million daily active users this is released into a nice 5% increase throughout the final quarter of 2017. While Facebook?(NASDAQ:FB 184.76 -0.25%) still dwarfs Snapchat in active users (1.4 BILLION), they can lost 700,000 daily users in Q4. Without a big chip in the pile, this can be the first-time Facebook has EVER reported a loss of users. Snapchat is largely determined by younger demographics as shown here:
Mixed outlook moving forward
While Snapchat has now suffered largely negative feedback in the interface redesign, the company managed to post its best ever quarter in relation to revenue. (I can note here that this predates the redesign that\’s only released this quarter..) The final quarter of 2017 saw Snap Inc. post revenue of $286 million, having a lack of $350 million. Snapchat continually find it difficult to monetize effectively despite its massive user base not wearing running shoes is growing in the rapid past since the application first released the government financial aid 2011.
Snap Inc. initially offered shares to your public at $17/share gets hotter was in Lse with regards to a last year and optimism of the quickly growing social websites platform saw shares quickly spike close to $26/share. However ever since then investors have cultivated a lttle bit wary evidenced by share prices who have sagged and remained stagnant ever since then. Snapchat is addressing lackluster Android camera performance, a significantly maligned new graphical user interface, and continues to find effectively make money. It will be fascinating indeed to determine their Q1 2018 earnings statement as a result of be released sometime this can.