Snap breaks into ‘startup squads’ as ad revenue stalls
Snap is shaking up its structure in a bold move. Snap breaks into ‘startup squads’ as ad revenue stalls, with CEO Evan Spiegel announcing a shift toward small, agile teams of 10 to 15 employees. The restructuring is designed to help the company innovate faster and compete against larger rivals in the social media space.
Why Snap is betting on startup squads
The decision comes at a critical time. Snap’s 5,000-person workforce has been under pressure as advertising revenue growth slowed to just 4% in the second quarter. Even more concerning, North American daily active users dipped by 2% to 98 million — a worrying trend in Snap’s most valuable market.
By reorganizing into startup-like squads, the company hopes to spark creativity, speed up product development, and avoid the sluggishness that often plagues bigger tech firms. Each squad will act like a mini startup, working independently but aligned with Snap’s long-term vision.
The ad revenue challenge
Advertising has long been Snap’s core business. But with competition from TikTok, Meta, and YouTube intensifying, Snap’s ad revenue has struggled to keep pace. The stall highlights the need for fresh strategies that don’t rely solely on ads.
The shift toward smaller squads is one such strategy — but success will depend on whether these teams can deliver features that re-engage users and attract advertisers back to the platform.
A bright spot: Snapchat+ growth
Despite the ad struggles, there’s one area showing real promise. Snapchat+ subscriptions are now generating over $700 million in annual recurring revenue. More than 15 million users are paying for premium features, making it one of Snap’s fastest-growing opportunities.
This signals that while the ad business is lagging, direct revenue from subscriptions could play a much bigger role in Snap’s future growth.
What’s next for Snap
As Snap breaks into ‘startup squads’ as ad revenue stalls, all eyes will be on whether this restructuring leads to real innovation. If the squads can launch products that keep users engaged and help diversify revenue, Snap could carve out a stronger position in the crowded social media market.
For now, it’s a gamble — but one that reflects the urgency of the challenges ahead.
