"Snap Inc. SNAP Chief Executive Evan Spiegel announced a major organizational restructuring on Monday, implementing startup-style "squads" to accelerate growth initiatives as the social media company grapples with slowing advertising revenue and intensifying competition from tech giants. In a memo sent on Monday, Spiegel outlined plans to form five to seven teams of 10-15 employees each, operating like independent startups within the company."
"The restructuring comes after Snap's advertising revenue growth decelerated to just 4% year-over-year in the second quarter of 2025, marking a significant slowdown for the Snapchat parent company. Snap's advertising struggles reflect broader competitive pressures from Meta Platforms Inc. META, Alphabet Inc. GOOGL GOOG and ByteDance's TikTok. The company reported a net loss of $263 million in the second quarter, despite improvements in operating cash flow to $88 million from a $21 million loss year-over-year."
"The CEO emphasized targeting medium-sized customers where penetration remains below 0.5%, with each new business development activation contributing nearly $6 million in annualized revenue on average in the U.S. market. Snap's user growth is showing signs of deceleration, particularly in North America, where daily active users declined 2% year-over-year to 98 million in the second quarter. Guggenheim analyst Michael Morris cited third-quarter data indicating global audience growth of 2.3%, down from 3.9% in the prior quarter."
Snap reorganized into five to seven startup-style squads of 10-15 employees each to accelerate growth initiatives amid slowing advertising revenue. Advertising revenue growth slowed to 4% year-over-year in Q2 2025, and the company posted a $263 million net loss while operating cash flow improved to $88 million from a $21 million loss. Snap faces intense competition from much larger tech firms including Meta, Alphabet, and ByteDance's TikTok, and aims to target medium-sized advertisers with penetration below 0.5%. Each new business development activation is estimated to add nearly $6 million in annualized U.S. revenue on average. User growth has decelerated, with North American daily active users down 2% to 98 million and global audience growth slowing to 2.3%.
Read at Benzinga
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