Snap Inc. announced it will cut 20 percent of its workforce after its stock price plummeted 80 percent and the company performed far below its revenue expectations. Some say big tech’s inability to thrive should be a warning to Black media.
According to The Verge, people familiar with the situation said the plan has been in the works for weeks, and some of the tech company’s teams will get hit harder than others. The company confirmed the move on Wednesday, Aug. 31.
The popular platform is not the only large tech company to experience a drop in revenue, stock and advertising dollars. A recent report in The Information says other big tech companies like Meta, Alphabet (Google’s parent company), Amazon and Apple “are now experiencing a slowdown similar to Snap’s” regarding hiring.
Though Snap’s layoffs far exceed that of its peers, the industry overall is doing an about-face from the aggressive hiring frenzy many implemented during the first two years of the pandemic.
Many Black media companies and professionals believe Snap and other tech companies’ faring with advertisers signals a warning to their bottom lines.
Some have been vocal in voicing their concern they will be first on the chopping block if the advertising recession that industry experts have predicted comes forth.
Despite the gains made by Black media since George Floyd’s callous murder sparked unprecedented racial justice protests in 2020, some Black media owners are not certain companies will continue to honor their commitments to “Buy Black” more frequently.
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“The first thing that gets cut in a recession is us,” Joe Anthony, founder of creative and digital agency Hero Collective and media and tech company Hero Media, told Digiday. “If you are brown, you get turned down. We start being looked at as a ‘nice to have,’ not a ‘need to have.’”
Anthony’s sentiment stems from the reality captured in the adage, “When America catches a cold, Black America captures the flu.”
Traditional advertisers are not the only ones called out for perpetuating the saying. Georgia Congressman Hank Johnson sent a letter to President Joe Biden about the reality also being evident in government spending on advertising.
“The federal government spends billions of dollars a year in paid advertising. However, the federal government’s process for allocating advertising dollars fails to recognize and value the unique relationship that Black-owned media have with their audiences,” Johnson wrote, according to the Washington Informer.
He added that “successful Black businesses hire and promote Black Americans at a much higher rate than other businesses. They are, consequently, the key to building successful Black communities.”
However, Lisa Torres of Publicis said she’s noted a change in the industry since 2020. “Enough has changed in our industry, to prove and show value in [diverse media’s] proposition,” Torres told Digiday.
She added it is now more likely to see budget cuts across advertisers’ budgets as opposed to them just nixing Black publishers.
“That’s the change. Historically [that budget] would just go away, and [brands] would cut all of it,” Torres continued. “But that’s not happening. We have changed behavior over the last two years. They have developed partnerships and see the value in the media… so they’re willing to keep it on. What we want is equity in that. We don’t want just one set of vendors to get cut.”
It’s something Dévon Johnson hopes is true. As CEO and founder of BleuLife Media Group and co-founder of the non-profit organization The Black Owned Media Equity and Sustainability Institute, Johnson advised brands against using the recession as an excuse to cut ties with Black media.
“Brands could use that incremental lift that diverse media provides, that will positively impact [a brand’s] bottom line in the recession,” Johnson told Digiday.
He noted budgets should get cut from the top “because you’ve already been spending there. You want new customers to grow your customer base … Give it to us, don’t take it from us.”