Snap Chief Executive Officer Evan Spiegel wants the Snapchat maker to break even this year, The Information reported Thursday, citing sources close to the firm. The 27-year-old is said to have unveiled the ambitions goal via a recent directive addressed to all employees but hasn't elaborated on the matter, nor did he disclose how aggressively the milestone is to be pursued. The Venice, Los Angeles-based company withheld employee bonuses for 2017 due to missed internal targets despite the fact no such goals have been communicated to its staff beforehand, industry sources claimed earlier this month.
Much like every other growing business, Snap is likely to be committed to increasing its revenue going forward, yet doing so will hardly be enough to meet Mr. Spiegel's ambitious goal on its own. Snap's 2017 bottom line was $720 million in the red before taxes, interest, and charges. The company lost $350 million in the final quarter of the last year alone but still touted the period as its most successful one to date, largely due to the user growth Snapchat managed to reinvigorate, having attracted nearly nine million new people over those three months. Due to that state of affairs, Snap is most likely to pursue profitability through aggressive cost-cutting efforts such as major layoffs. The firm already conducted at least two rounds of firings since September and recently started another one that's said to be its largest wave of layoffs to date. Approximately 120 software engineers will hence lose their jobs in the coming weeks, according to recent reports.
Snap also slowed down hiring since late summer in an attempt to control costs that spiked over 2017. Its first year since going public was largely disappointing to investors, with the firm only managing to beat its fourth-quarter expectations, though not before analysts lowered them by a significant margin. Most current estimates don't see the Snapchat maker reaching profitability before 2021 at the earliest but don't account for its aggressive cost-cutting endeavors that are now underway.