TikTok has cut its revenue targets from $2 billion to $10 billion amid a global online advertising slump that has hit tech giants including Meta and Twitter
- The Financial Times reports that TikTok has cut its revenue targets for 2022 by $2 billion.
- The CEO of the popular video-sharing app had predicted revenue of $10 billion instead of $12-14 billion at a company meeting in September.
- The lower targets are a sign that the global online advertising downturn is affecting TikTok in the same way it has hurt Meta and Twitter.
- The news comes after Mark Zuckerberg’s Meta and Elon Musk’s Twitter announced they were laying off thousands of employees this week.
TikTok has cut its revenue target for this year by $2 billion as the popular video-sharing app faces the same global online advertising slump that has affected all major tech firms, including Meta and Twitter.
Revenue targets were cut 20 percent to about $10 billion from a projected $12 billion to $14 billion. CEO Shou Zi Chew announced the crossover during a virtual all-hands meeting in September, four people told the Financial Times.
The business publication reports that at that meeting, the employees were accused of not making enough sales in the areas of advertising and e-commerce.
The low revenue targets are the first clear signal that TikTok, which is hugely popular especially among young adults, is facing the same headwinds as Mark Zuckerberg’s Meta and Elon Musk’s Twitter.
TikTok has cut its revenue target for this year by $2 billion as the popular video-sharing app faces the same global online advertising slump that is affecting all major tech firms.
The reality set in this week, with Meta laying off 11,000 employees — about 13 percent of its workforce — with CEO Mark Zuckerberg claiming responsibility for massive layoffs. The California-based company recently reported a 4 percent decline in revenue.
Silicon Valley mainstays, which saw a huge revenue boom during the Covid pandemic – as a result of lockdowns that forced everyone to go online – are now struggling as consumers return to normal spending and behavior patterns.
According to PCMag, Meta has added 43,000 employees since the start of the Covid pandemic, betting on e-commerce to continue its explosive growth.
The reality set in this week with Zuckerberg claiming responsibility for massive layoffs that laid off 11,000 employees — about 13 percent of its workforce. The California-based company recently reported a 4 percent decline in revenue.
Mogul said: “Not only has online commerce returned to its previous trends, but the macroeconomic downturn, increased competition and the loss of advertising signals have caused our revenues to be much lower than I expected. I made a mistake and I take responsibility for it.”
Twitter, newly created under Elon Musk’s leadership, cut about 3,700 jobs this week – even as some employees are asked to return, the platform faces a decline in advertising revenue and the threat of layoffs by many users. new owner.
Google-owned YouTube and Snap also saw slowdowns in revenue growth in the third quarter, missing Wall Street estimates.
According to eMarketer, US advertisers are projected to spend $65.3 billion on social media in 2022, up 3.6 percent year-over-year, roughly 10 times slower than in 2021.
TikTok, which is owned by China-based company ByteDance, has experienced tremendous growth over the past two years. During the Covid lockdowns, tens of millions of new users downloaded the app and were able to connect with people around the world.
Founded in 2016, the platform has attracted 1 billion users in just over five years. According to Statista, only Facebook Messenger reached one billion users faster in 4.9 years.
Record labels including Universal Music Group, Sony Music Entertainment and Warner Music Group are reportedly in talks with the tech company to get a bigger share of advertising revenue and royalties.
Twitter CEO Elon Musk and Meta CEO Mark Zuckerberg both lead social media companies that are withering under the global online advertising downturn.
Twitter, newly created under Elon Musk’s leadership, cut nearly 3,700 jobs this week – as the platform faces declining ad revenue and an exodus from many users shut down by its new owner.