Snap is laying off 100 employees mostly in advertising and sales | Hacker News Reader

Snap is laying off 100 employees mostly in advertising and sales

cnbc.com

65 pointsbspn31 comments

Anecdata, but in my group people are using Snap less and less. Meanwhile I see more and more Instagram stories each week.

It's sad for the employees affected, but this could be a wake up call to Snap. I like the premise of Snapchat, that messages are ephemeral, but it seems like Snap the company doesn't realize that people don't use their app for sponsored stories. It's primarily a messaging tool for friends.

Growth rarely lasts forever, and Snap had more employees than generally considered reasonable with such a single-purpose app. I'm surprised they aren't laying off more engineers though, personally.

Agreed. Comparing Snap to other companies with similar # of employees, it really shows how bloated the company is especially since there is only _so_ much you can work on with a single purpose app. I wonder if their decentralized office tactic helped lead to this?

I think they already had a round of layoffs focused on engineers.

It says in the article they did, yeah. Still a bizarre amount left in my opinion. I can't imagine what they do all day.

Implement new filters?

they still need them to make a ui change that users might actually like.

I think Snapchat and users have opposite views on what the UI should be:

Snapchat want to show the maximum of sponsored contents to the users (BTW it took me a week to stop swiping right by reflex after the update) and users just want to send pics to theirs friends.

I know that my usage of Snapchat is anecdotal. If anyone has data on the percentage of users that voluntary look at sponsored content, I'm interested.

Well, at least they were kind enough to completely split up the sponsored content (right screen) from user content (left screen). With the update I entirely stopped viewing sponsored content, aside from the occasional ad when viewing stories. An interesting side effect is half of the ui is entirely useless now, which leads to a strange ux, but still better than interleaving everything (ie facebook, instagram, twitter, etc.).

>Snapchat want to show the maximum of sponsored content

Yet, with this latest update, they removed the stories/sponsored mixture and banished sponsored content to its own screen. Once you get over the habit of swiping right, you never have to open that screen again... if anything, they reduced the amount of sponsored content I see.

But now you see ads between stories. I don't remember if they introduced that with the update or before.

I wonder how many hundreds of millions of dollars the mistake of signing that $2 billion Google Cloud deal [1] has cost them unnecessarily and how many jobs are going to get cut as an ultimate consequence.

Their SG&A expense line was ~$450 million the last three quarters of 2017, up from $182 million in Q4 of 2016.

Daily active users only increased from 158m to 187m in that time, which should have prompted a very modest cost increase in their operating results. They added upwards of $800 million in new annual expenses that should have never been stapled on to the business. Reducing that back to where it was, would still leave them burning $150m or so per quarter in net income (maybe $100m in cash per quarter) in 2018 assuming sales hold up, but it'd be a lot closer to manageable. As it is, they're massively bleeding red ink.

Free cash flow was around negative $800m the last four quarters. Their cash went from ~$3.2 billion to $2 billion in 2017. It looks like that will be down to ~$1.2 billion by the end of 2018.

[1] http://fortune.com/2017/02/02/snap-will-spend-on-google-clou...

My sister is in college and works at Starbucks.

She and a group of her coworkers delivered coffee to one of their offices in Santa Monica.

Their last major update really upset a lot of people, so when my younger sister ran into a Product Manager, she chatted with him and mentioned the update.

His response was, change is good, deal with it.

It really rubbed me the wrong way on multiple levels. 1) You're being a asshole, 2) you're being an asshole to your key demographic, and 3) I agree with her, the new update sucks.

There is an odd feeling I get about Snapchat, it's almost as if they are successful despite themselves.

One look at the content on the "Discovery" page and you instantly understand the platform's weakness. No one is making genuine, useful, compelling content. It's almost exclusively hyper-vapid garbage.

I checked SNAP and MUSICA.LY for the first time 2 weeks ago to see what my 12 year old was seeing.

Hint if an adults first exposure in your app (before connecting to their existing social network) shows them pornography, or a random teenager cutting themselves... your business might not be sustainable.

I'm not saying you can't profit massively off of teenage angst. But if you LEAD with that like Tumblr and Myspace, people will grow out of your platform.

I think Reddit and Pinterest profit just as much from that questionable content without alienating the people who will ultimately be doing massive ad buys.

Also Snap tried to FORCE the Kardashians on you. They couldn't afford to have them go against the platform. They should have hired them as brand ambassadors to publish multiple times daily, and maybe even exclusively if Snap could afford it.

i think the kardashians are smart enough to not tie their brand to a single platform. it wouldn't make sense for the long term, even if they were to be paid out a lot for it.

I agree. The few times I accidentally swipe to that page and tap something that seems interesting (usually Sports Center), I haven't actually been sent to that news article. Rather, I'm subjected to the entire lineup of videos from the advertiser and lose my patience trying to find the particular story I tapped on.

Really turns me off of tapping future sponsored content.

Seems like the quality of content & comments posted on HN goes down dramatically whenever the discussion is on Facebook or Snap. I understand these are hot-button companies but I think HN could do better than to have these aimless discussions on obscure things. For the vast majority of companies this news would hardly even get posted.

Sadly it seems like the comments are becoming more like reddit comments. I think more and more people are coming from there which isn’t a bad thing but they are bringing that style of comments.

Niche topics will have deeper comments because the people interested typically have a deeper understanding. Then you have Facebook and Snap which everyone has an opinion on even without understanding the situation.

Very good postulation I had not thought of that. I think it will be important for HN to retain that level of quality as I think we have all benefitted from the higher-than-average level of thought that goes into an HN comment relative to other internet communities.

It’s rarely one layoff once the momentum stops. Companies usually do the first one or two thoughtfully with good packages, but eventually it turns into just another tool for management. The irony is that management research suggests that cutting work is where the benefits come from - just cutting the people doesn’t help.

This seems particularly alarming for Snap - they badly need a coherent go to market strategy and client relationships.

IMO They need to work hard on a clear business model and ramp up sales against that, not fire the sales people for terrible strategy...

How should we view these layoffs in comparison to say the ones done by twitter? They did a bunch of layoffs a year or so ago and it’s market cap has recovered significantly since then.

The first wave of layoffs Snap did were related to the hw engineering org. AKA those glasses they mad, right? They were a commercial failure and a distraction so I viewed that as largely a positive sign.

This wave of layoffs seems like they are trimming the fat in sales/marketing, again not necessarily a bad thing. Other companies like twitter have done this and gone on to recover.

I think the biggest problem with Snap right now is how similar it is to Instagram now that Instagram has cloned stories. Twitter served a far different use case from Facebook and they seem pretty safe now that FB is backing away from news.

The thing is stories was never Snap's core product. If you remember back when SC first came out, there were no stories at all... although they had a "select all" button for firing off snaps to your entire friends list.

Refer to Snap's S-1 filing[1]: 60% of daily active users send snaps daily, but only 25% of them post to their story.

As far as I'm concerned, Insta et al are welcome to "stories" clones. Stories aren't what I, or most users, use Snapchat for.

[1] https://www.sec.gov/Archives/edgar/data/1564408/000119312517...

Right, it wasn’t their core product but it was a thing that had a clearer monetization strategy.

As far as I can tell no one has figured out a way to monetize private DM/group messaging via advertising. I actually deleted Facebook messenger from my phone in disgust a while back the first time I saw an advertisement mixed in among my list of conversations; I can’t even imagine what it would be like to have ads directly inserted in the messaging flow.

I wouldn't be surprised if they start inserting ads the same way they do after stories now: after you finish watching a received snap (or snaps), you get a video ad immediately after (and the user builds a reflex to down-swipe within a tenth of a second).

Out of curiosity, how does a company lay off ~220 employees yet still have many open positions on its website? I looked at the jobs section for snap and it seems like they have a plethora of engineering jobs despite laying off 120 engineers. Why?

> Out of curiosity, how does a company lay off ~220 employees yet still have many open positions on its website?

Quite easily if they are different roles, or if they are trying to fill but with less experienced candidates at lower pay (you could do a pay cut, but the morale impacts of that make it more practical to do a layoff and hire.)

> I looked at the jobs section for snap and it seems like they have a plethora of engineering jobs despite laying off 120 engineers.

Engineers aren't completely interchangeable, and management views them as less adaptable than they are.

They could be cutting under-performers, replacing engineers skilled in Talent A with Talent B where Talent B isn't necessarily easy to learn, or consolidating offices.

I'm seeing all of the above at my current place.

Echoing maywittyname's response +.

they replacing Talent A with Talent A but lower pay scale.

So, redesigning a barely useable UI, making it harder to use and prioritizes unrelated ads is bad for business?

Wow, TIL

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