Snap Inc. announces two big hires ahead of its critical third-quarter earnings report
Snap Inc. is adding two new executives to take on the responsibilities of former chief strategy officer Imran Khan — including a major hire from Amazon that could help the struggling social media company turn toward profitability. Jeremi Gorman is leaving her job as chief of global advertising sales at Amazon to become Snap’s new chief business officer, and Jared Grusd, who was chief executive of the Huffington Post, is joining as chief strategy officer, Chief Executive Evan Spiegel said in a note to employees Wednesday. The company’s shares rose as much as 2.5% on the news before settling. The hires comes just one day before the company is set to release its third-quarter earnings statement amid a long decline of its share price, from $20.75 in February to under $7 this last week. At Amazon, Gorman saw the retailer grow to one of the three largest online advertisers, after Facebook and Google, with ad revenues above $2 billion in the first quarter of this year. “Jeremi joins us with proven expertise and talent that will make our platform even better for our partners and I am excited to have her on our team,” Spiegel wrote in his note. When Khan left Snap in early September, the company announced that his replacement would have the new title of chief business officer. With today’s hires, the company is effectively splitting Khan’s former role into two new positions — one focused on sales and marketing, the other on global user growth. Snap has seen a string of high-profile departures since its 2017 IPO. In May, Chief Financial Officer Drew Vollero departed and was replaced by Amazon.com Inc. veteran Tim Stone. Snap’s vice president of product, Tom Conrad, also left earlier this year. Conrad, who was reportedly one of Spiegel’s closest lieutenants, told the publication TechCrunch that he was planning to leave the tech industry altogether. None of the departures, however, were more significant than Khan’s, who had played an instrumental role in Snap’s initial public offering in 2017 and led the company’s transition to a more lucrative automated advertising business model. Sources at the time said Khan was leaving to start his own technology investment firm. Under his watch, Snap grew from just a few dozen employees to more than 3,000 operating in 13 countries. In 2016, Khan’s compensation totaled $5.5 million, according to a filing made with the Securities and Exchange Commission last year ahead of Snap’s IPO. Snap says the turnover is not reflective of a company in chaos, but rather the regular churn of a young firm finding its footing. The company has faced major headwinds since it redesigned Snapchat late last year following longstanding criticism that it was too hard to navigate. But the changes didn’t go over well, even sparking a Change.org petition with 1.2 million signatories. In May, Snap tweaked the redesign and put content back into reverse-chronological order, as it had been since Snapchat first went live. The damage was done, however. Snap reported its first quarterly decline in daily active users when it released its second-quarter financial results in August. Analysts are waiting to see whether that trend has been reversed in Thursday’s earnings report.