Shares of Snap Inc., the parent company of instant messaging app Snapchat, plunged over 40 percent on May 24 after the company warned investors it would be unable to meet its own targets for revenue and adjusted earnings in the current quarter.
Those numbers were already below analysts’ estimates. However, the company has now revised those figures, saying it expects both revenue and earnings to fall short of its previous estimates.
"As a result, we believe it is likely that we will report revenue and adjusted Ebitda below the low end of our Q2 2022 guidance range."
Elsewhere, in an internal memo to employees on Monday, Snap CEO Evan Spiegel said that the company would significantly slow hiring for the rest of the year amid rising costs and supply chain shortages.
Despite this, Spiegel remained optimistic about future growth, stating that the company has made progress in growing its revenue and that this, "combined with the strength of our balance sheet, has positioned us well for the current environment."
"As a result, 2022 remains a significant investment year for Snap, despite the ongoing market volatility," Spiegel wrote.
"Responsibly managing our expenses will allow us to invest through this period of time and emerge stronger as a business. Moving forward, we will be taking steps to reprioritize our investments—continuing to invest across our business priorities, but in many cases doing so at a slower pace than we had planned given the operating environment."
The company plans to hire new team members and will continue recruiting for open roles but will slow the pace at which it hires for unopened roles for the remainder of the year, as well as push some planned hiring into 2023.
The CEO added that Snap Inc. plans to hire 500 more people between now and the end of 2022, versus the 2,000 new people it hired over the past 12 months.
In addition, he said the company will evaluate the remainder of its 2022 budgets and leaders have been asked to "review spending to find additional cost savings."