Snap Shares Plummet 40% in 2025 Following Profit Warning and Hiring Freeze
In 2025, Snap Inc. experiences a sharp 40% drop in share price after CEO Evan Spiegel announces a hiring slowdown and lower-than-expected revenue growth amid challenging economic conditions.
In 2024, Snap's stock has tumbled by nearly 40% in early trading, continuing a downward trend that has seen shares fall over 70% year-to-date and more than 80% from their 2021 peak.
CEO Evan Spiegel communicated to employees that the company will drastically reduce hiring efforts for the remainder of the year, planning to onboard only 500 new employees compared to 2,000 last year. This move accompanies a warning to investors that revenue growth will not meet prior forecasts.
Spiegel cited multiple headwinds impacting Snap’s financial outlook, including rising inflation, higher interest rates, supply chain disruptions, labor market challenges, the ongoing war in Ukraine, and the effects of Apple's updated privacy policies. These factors collectively have pressured revenue, pushing expectations below previously issued guidance.
Caleb Silver, Editor-in-Chief at Investopedia, noted, "While macroeconomic factors like inflation and geopolitical tensions are cited, the broader issue affecting Snap and its peers is a decline in user engagement across social media platforms—a trend unlikely to reverse with economic improvements alone."
Earlier in 2024, Snap reported first-quarter earnings that missed analyst sales and profit estimates, initially projecting revenue growth up to 25%. Following the latest announcement, competitors also faced declines: Meta Platforms dropped 7%, Twitter shares fell nearly 4%, and Pinterest slid 12%.
This challenging environment underscores the shifting dynamics in social media, with Snap's strategic hiring slowdown reflecting cautious optimism amid uncertain growth prospects.
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