By Alex Heath
It’s been a tough year for Snap Inc.
Externally, a controversial redesign of Snapchat ($SNAP) has led to the app bleeding daily users and Wall Street souring on the company’s future growth prospects. Internally, current and former employees told Cheddar that morale has been negatively impacted by multiple rounds of layoffs across the organization, shifting directives from upper management, and a steady stream of executive departures.
Further compounding recent struggles, employees have been told they won’t receive cash bonuses for the second consecutive year, according to multiple people familiar with the matter. Instead, top-performing employees are receiving a discretionary incentive bonus in the form of more stock, the people said.
Snap declined to comment for this story.
The news caps off what has been 12 of the hardest months in Snap’s history as a young company. Snap's stock was trading at an all-time low on Thursday, teetering just above $5 per share amidst a wider sell-off in the markets. The company's stock peaked at $27 on its first day of trading in March 2017.
For 2018, CEO Evan Spiegel gave the company an internal goal of reaching break-even by the end of the year. While Snap has yet to report its fourth-quarter earnings, it lost $325 million in the third quarter against $298 million in revenue. Employees were also denied a bonus in 2017 for failing to meet company targets.
Given the company’s quarterly losses and declining user base, investors have questioned whether Snap will be able to meet Spiegel’s new goal of achieving full-year profitability in 2019.
Employees were given that new target two months ago in an internal memo that was published by Cheddar. Snap’s chief financial officer, Tim Stone, later told investors that “an internal stretch goal is not a forecast and it's not guidance.”
Snap will go into 2019 with an almost completely reshuffled executive team after the hiring of new CFO Tim Stone, Chief Business Officer Jeremi Gorman, and Chief Strategy Officer Jared Grusd. The new hires replace a string of longtime departures in upper management, including its business chief, Chief Strategy Officer Imran Khan, and Vice President of Content Nick Bell.
Another name to add to Snap’s list of executive departures is David Salesin, according to people familiar with the matter. Salesin was previously a vice president at Adobe and led Snap’s research group under Co-Founder and Chief Technology Officer Bobby Murphy. He’s leaving amidst heavy employee turnover in the research group, the people said.
Meanwhile, Snap’s hardware group that’s responsible for Spectacles just appointed its third leader in just six months. That group is readying a third, more expensive iteration of Spectacles with two cameras that it had planned to ship by the end of the year.
Hopes for a rebound in Snapchat’s user growth are currently placed on a forthcoming redesign of its Android application, which has been in the works for more than a year and has yet to be made available widely.
Snap hasn’t said when the Android redesign will be shipped, but CEO Spiegel acknowledged in the leaked memo that Snapchat needed to focus on improving its Android experience to win more users. The company is also working on a gaming platform for outside developers that has yet to materialize.
Along with the lack of an end-of-year bonus, Snap cut back its spending on company parties this year.
While CEO Spiegel threw a lavish holiday party complete with a performance by Drake at the end of 2017, much smaller and cheaper parties were held across the company’s various departments this year, according to people familiar with the matter.