• Snap hired 2,000 employees over the last 12 months
  • Snap shares plunged 30% during extended trading Monday
  • Snap has asked its leaders to 'review spending' for the remaining months of 2022

Camera and social media company Snap told employees that it will slow down hiring for the remaining months of the year. The news caused Snap shares to plummet 30% during extended trading Monday.

In a memo sent to employees, Snap CEO Evan Spiegel said the company is expecting to hire “more than 500 new team members between now and the end of the year.” The Snapchat parent company hired about 2,000 new workers over the past 12 months. The memo, which was obtained by The Verge, also cited “rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more” as reasons for Snap’s recent struggles.

As part of the efforts to further cut spending, Spiegel said Snap has asked its leaders to “review spending” for the remaining months of 2022.

News of slower hiring at Snap came shortly after the company revealed in a regulatory filing with the U.S. Securities and Exchange Commission (SEC) that the “macroeconomic environment has deteriorated further and faster than anticipated.” As a result of the deterioration, Snap said in the filing that “it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.”

Following the warning of lower than initially expected revenue, Snap shares plunged 30% in after-hours trading, CNBC reported. Other social media companies also dropped after Snap’s filing, with Facebook parent Meta plunging 7% and Pinterest shedding 12%. Twitter fell nearly 4% Monday. CNBC projected that if Snap plummets more than 26.6% on Tuesday’s trading, it would be the worst day for the stock since going public five years ago.

Last quarter, Snap projected second-quarter revenues to grow between 20% and 25%. The said projections were below Wall Street estimates, Axios reported. However, Snap isn’t the only company that has experienced stalling growth.

Earlier this month, Meta announced that it will either slow down or temporarily freeze the hiring of many mid-to senior-level positions. Meta’s hiring slowdown announcement came a week after it posted its slowest quarterly revenue growth in years, CNN reported.

Meta’s Q1 2022 profits were down 21% from the same period in 2021. Facebook’s parent company has faced advertising disruption due to Apple’s privacy practices revamp and Russia’s blockage of Facebook and Instagram in April.

The Snapchat app is seen on a smartphone in this illustration taken July 13, 2021.
The Snapchat app is seen on a smartphone in this illustration taken July 13, 2021. Reuters / Dado Ruvic