Snap announced today that it laid off 20 percent of its staff in a restructure intended to cut costs and save the Snapchat parent’s plunging stock price. Beyond the headcount reduction of about 1,280 employees (Snap has roughly 6,400 staffers), one of the key casualties here are Snap-funded originals. Snap will no longer invest in new original programming, although the ones announced in May will still air as planned starting this fall.
What are/were Snap Originals? Developed with and paid for by Snapchat but produced by third-party production companies, there are more than 150 of them, including “Addison Rae Goes Home” starring influencer Addison Rae, Meme Mom” starring influencer NicoleTV, and “Coming Out,” in which LGBTQ+ influencer Manny Mua hosts a show that reflects the coming out journey for six young people. It also featured shows hosted by pro basketball player Stephen Curry and Olympic gymnast Simone Biles.
Shot in vertical orientation and made for swift consumption, Snap Originals bear a certain resemblance to the failed content experiment that was Quibi. Other outlets that stumbled with their self-funded originals are Facebook Watch (although it continues to have great success with for the horizontally oriented “Red Table Talk”) and YouTube Originals (which saw “Cobra Kai” and “Step Up” go on to greater success at Netflix and Starz, respectively).
Existing commitments will be honored, Snap said, but nothing will be renewed. However, Snapchat will continue its first original production, “Good Luck America,” which is hosted by former CNN political reporter Peter Hamby and won the Edward R. Murrow Award for Excellence in Innovation in 2017. It will also air shows produced by NBC News (“Stay Tuned”), ESPN (“SportsCenter” for Snapchat), and E! (“The Rundown”).
Snapchat’s curated Discover platform currently features a mix of celebrity-driven reality shows and scripted entertainment programming. According to Snap, more than 40 Discover channels each had a reach of over 25 million global viewers in the second quarter of 2022. Going forward, Discover will still offer shows — just not ones financed by Snap.
A Snap spokesperson told IndieWire its content business remained a “top priority” — just not the kind of content that costs them money. “Going forward, we will focus our efforts on content created by our partners and by creators,” the spokesperson said.
Snapchat’s Spotlight, which is comprised of user-generated content, will keep on keepin’ on. Total time spent watching Spotlight grew 59 percent year to year. Its monthly active users grew 46 percent and topped 270 million in the second quarter of 2022.
Snap CEO Evan Spiegel told his staff Wednesday the company’s three strategic priorities going forward will be “community growth, revenue growth, and augmented reality.” Also on Wednesday, Spiegel promoted former Amazon Web Services executive Jerry Hunter from senior vice president of engineering to chief operating officer.
The Snap restructure will result in an estimated $500 million in savings in the “annualized cash cost structure relative to Q2 2022,” Spiegel said. It’s not just costs that are out of hand: While revenue continues to grow (quarter-to-date revenue growth is about 8 percent year-over-year, Snap said Wednesday), the growth rate declined.
“It has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses,” Spiegel said in his note. He also believes this mass reduction in staff will stave off future reductions. Read Spiegel’s email to staff here.
Shares in Snap closed Tuesday just north of $10 apiece, or less than one-eighth of the heights it reached last September. Back then, Snap’s market cap climbed north of $130 billion; it’s less than $18 billion today. SNAP shares increased more than 8 percent on Wednesday.
“Good Luck America” launched in 2016; the first Snapchat Originals slate came two years later. Good luck, Snap.
