Snap CEO Evan Spiegel said on Wednesday that the app will compete with TikTok by sticking to its original strategy of photos and visual messaging as well as its expansion into augmented reality.
“We’re gonna stick to that strategy, really helping friends and family communicate with visual messaging,” Spiegel said at Vox Media’s Code Conference in Los Angeles. “So I think we’ll complete by continuing to focus on the reason why our community gets value … and just drive towards that North Star, over time delivering more and more value to the people who use our service.”
The co-founder’s remarks follow the decision to lay off over 1,200 Snap Inc. employees — roughly 20% of the company’s workforce. The cost-cutting move comes as Snap’s stock has declined nearly 80% this year — and dropped another 6% in after-hours trading after news of the layoffs broke.
The downsizing, which began Aug. 31, was prompted by financial conditions, according to Spiegel, who citing the company’s current 8% revenue growth as “well below what we were expecting earlier this year,” in a memo to staffers Aug. 30.
In addition to the layoffs, Snap was announced to also scrap abandon projects like the Pixy photo-taking drone — which Spiegel calls a “wonderful low margin product” — as well as a slew of Snap Originals premium shows. One of the company’s development teams, which focuses on creating mini apps games inside Snapchat, and the hardware department, which originated the Spectacles glasses, will be primarily targeted in the layoffs, The Verge reported, and Zenly, a social mapping app that Snap purchased in 2017, will also face cuts.
Amidst the app’s restructuring, the photo sharing app’s main three priorities as “community growth, revenue growth and augmented reality,” Spiegel said Wednesday.
“So much of communication is visual, which is why we focused on augmented reality,” he continued, noting that the app’s capability to “try on” clothing — which the CEO demonstrated in a Vogue — will help power commerce outside the app.
Although Spiegel named Meta as the social media company’s main competitor, he explained Snap’s hesitancy to enter the Metaverse.
“We believe most people are going to spend most of the time in the real world,” he said. “How can we augment that and make that better through computing? And that’s really different than this idea of virtual reality, which is about escaping the world.”