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Snap is remaking itself from the inside out. In a company-wide letter, CEO Evan Spiegel announced that Snap will now operate through small groups called startup squads, each made up of around a dozen employees. The goal is to restore focus and creativity inside a company that has grown large but lost momentum.
The change comes as Snap faces its toughest financial moment in years. Ad revenue rose just four percent last quarter, while daily active users in North America fell by two percent. For a company that once defined how people communicated online, those numbers reveal a shift in attention that algorithms cannot easily reverse.
Yet within the same report, there are signs of something different taking shape. Snapchat Plus, a subscription tier once viewed as experimental, now brings in over seven hundred million dollars in annual recurring revenue. More than fifteen million people pay for it, suggesting that Snap is learning how to move beyond dependence on advertising.
Spiegel also reaffirmed Snap’s long-term bet on augmented reality. The company is building its own glasses, which he describes as a step toward human-centered computing. In his vision, they could eventually replace the smartphone altogether. Competing visions from Meta and Google hint at a similar destination, but Snap’s smaller scale may give it the freedom to design differently.
Investors remain cautious. Snap’s market valuation sits near twelve billion dollars, down from more than one hundred billion at its peak in 2021. Spiegel calls the company’s current moment one of “startup-style potential,” an acknowledgment that what began as a social app must now rediscover how to build from uncertainty again.
Behind the restructuring, there is an unspoken recognition that scale can weaken clarity. Large organizations accumulate inertia. Smaller teams can move, decide, and create without waiting for permiSnap reorganizes into small startup squads as ad revenue slows and users decline, revealing deeper tensions between innovation and survival.ssion. In a way, Snap’s fragmentation is not collapse but return.