Snap said the economy slowed faster than expected last month and the social media company lowered its quarterly forecast, which boosted sales hours later.
Since the end of April, the company said, “the macroeconomic environment has deteriorated further and faster than expected. As a result, we are confident that we will be able to report returns below the Q2 2022 guideline and adjusted EBITDA.” Filing of US Securities.
Snap shares fell 31 percent, Alphabet 3.6 percent and Amazon 2.2 percent. Nasdaq futures also fell, with traders blaming Snap.
US stocks ended higher on Monday, with gains from banks and technology, but the rise follows Wall Street’s long-term weekly decline from the fall of dotcom 20 years ago and many investors are on edge.
In a memo seen by Snap chief executive Evan Spiegel Reuters he told employees that the company was slowing down hiring this year and creating a wide slate of issues.
“Like most companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine and more,” he wrote.
Last month, Snap forecast second-quarter revenue growth of 20 percent to 25 percent over the previous year.
The news came earlier this month following announcements by companies including Uber and Facebook-owned Meta that they would be controlling costs and appointments.
In the memo, Spiegel said Snap estimates the remainder of this year’s budget and “asked leaders to review spending to find additional cost savings.”
Although the company expects to hire more than 500 employees by the end of this year, he said some planned hiring will be pushed to next year.
© Thomson Reuters 2022