Teens still love Snapchat. But its business is struggling to grow up.

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After years of quietly thriving, the social app’s stock has crashed and it’s laying off employees amid new threats from Apple and TikTok.

Fast-forward three months, and the effervescence has evaporated, courtesy of a gloomy earnings report and the first mass layoffs in the company’s history. The company cut some 1,300 jobs from a workforce of more than 5,000, including entire teams, and shut down acquisitions such as theAs for the start-up accelerator, gaming business, original programming and tech magazine? All shuttered. The Pixy drone: discontinued.according to current and former employees.

“Morale is super low,” said one Snap employee, who spoke on the condition of anonymity to discuss company matters. They cited concerns about new leadership, the “Amazonification” of the workplace — a reference to the use of unforgiving performance metrics to grade employees — and the decline of its “kind” culture.

“People are definitely not as optimistic” about Snapchat’s future, the employee said. They noted that some colleagues were distraught that the layoffs included people on parental leave and employees who had been pivotal in the company’s diversity efforts.In the company’s telling, the biggest factor is a pullback by digital advertisers due to the Ukraine war, inflation and fears of a recession — conditions that also affect Snapchat’s rivals.

One big threat is the stunning rise of TikTok, the Chinese-owned video app that took off in the United States starting in 2018. The survey by Pew found it has soared past Instagram and Snapchat as American teens’ most heavily used social app other than YouTube.While TikTok and Snapchat don’t serve the same functions, they’re competing for the same young people’s time — and the same advertiser dollars targeting that demographic, said Ives, the Wedbush analyst.

Some of the advertising head winds are blowing straight down Highway 101 from Apple’s headquarters in Cupertino.s for app makers such as Facebook and Snapchat, curbing their ability to collect data on users for the purposes of targeted advertising. App makers were required to explicitly ask their users if they wanted their internet activity to be trackedThose changes led Snap and other tech companies to repeatedly warn investors that the changes would impact their revenue.

 

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