Snap CEO Hints At Hiring Slowdown, Spending Cuts After Warning Of Q2 Shortfall

Snap, Inc. SNAP shares tumbled to a two-year low in after-hours trading on Monday after the Snapchat parent company warned that it may miss its second-quarter guidance.

Following an 8-K filing to this effect, the company's CEO Evan Spiegel reportedly sent an internal memo to employees, seeking to clarify the company's position.

Revenue Slowing: Revenue at Snapchat continues to grow, although, at a slower pace than anticipated, Spiegel said, according to a copy of the memo shared by Bloomberg.

Reiterating the disclosure in the SEC filing, the CEO said revenue and adjusted EBITDA would likely come in below the low end of the guidance range. He, however, allayed concerns regarding a capitulation.

Spiegel said the company is well-positioned to navigate the current environment, thanks to the progress with revenue growth and the strength of its balance sheet.

The Snap chief also said 2022 would remain a "significant investment year" for the company despite the market volatility.

"Responsibly managing our expenses will allow us to invest through this period of time and emerge stronger as a business," Spiegel said.

Related Link: Snapchat Parent Brings A New Slate Of Original Content For You And Details AR Shopping Tools

Recruiting to Slow Down: As part of expense management, Spiegel hinted at slowing recruitment. He said the company will slow the pace of hiring for unopened roles for the remainder of the year and also push some planned hiring into next year.

However, Snap plans to hire new team members, including recruiting for open roles, Spiegel said.

Snap looks to add 500 new team members over the remainder of the year and also indicated that it will backfill existing positions in the eventuality of attrition if the roles are of high priority.

Spiegel also said the company is evaluating its budget over the remainder of 2022 and has asked for a review of spending to find scope for additional cost savings.

Price Action: Snap plunged 30.97% to $15.51 in after-hours trading Monday, according to Benzinga Pro data.