Snap Inc said the economy had deteriorated faster than expected in the past month, and that the social media company had cut its quarterly forecast, triggering after-hours sales.
“Since the end of April,”[ads1]; the macroeconomic environment has deteriorated further and faster than expected. As a result, we believe it is likely that we will report revenue and adjust EBITDA below the low end of our guidance range for Q2 2022, “the company said in a US securities file.
Shares of Snap (SNAP) fell 31%, Alphabet (GOOGL) fell 3.6% and Amazon (AMZN) fell 2.2%. Nasdaq futures also fell, with traders blaming Snap (SNAP).
US stocks had ended higher on Monday, led by gains from banks and technology, but the rise follows Wall Street’s longest streak of weekly declines since the dotcom bust more than 20 years ago, and many investors are still on edge.
Snap boss Evan Spiegel told employees in a note seen by Reuters that the company will lower its employment for this year and put up a wide range of issues.
“Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and outages, changes in platform policies, the impact of the war in Ukraine and more,” he wrote.
Last month, Snap predicted second-quarter revenue growth of 20% to 25% compared to the previous year.
The news follows statements from companies including Uber and Facebook owner Meta Platforms (FB) earlier this month that they would curb costs and hiring.
In the note, Spiegel said Snap would evaluate the rest of this year’s budget and “executives have been asked to review spending to find additional cost savings.”
Some planned hires will be pushed into next year, although the company still expects to hire more than 500 people by the end of this year, he said.