Snap Inc. is launching a radical organizational overhaul through innovative startup squads as the social media giant confronts stagnating advertising revenue and declining user growth. Consequently, CEO Evan Spiegel’s ambitious restructuring plan aims to inject startup agility into the 5,000-person company.
Snap’s Startup Squads Organizational Revolution
Snap officially announced its groundbreaking transition to small, autonomous startup squads comprising 10-15 employees each. This strategic move directly addresses the company’s need for faster innovation and improved competitive positioning. Moreover, the restructuring comes as Snap faces significant market pressures.
Revenue Challenges Driving Change
Advertising revenue growth dramatically slowed to just 4% in Q2 2025. Simultaneously, North American daily active users declined 2% to 98 million. These metrics represent concerning trends in Snap’s most crucial market. However, the company discovered a bright spot through its subscription service.
Subscription Success and AR Ambitions
Snapchat+ subscriptions now generate over $700 million annually from 15 million paying users. Additionally, Snap continues investing heavily in Specs, its proprietary AR glasses project. Spiegel envisions these glasses will eventually replace smartphones entirely. He describes this initiative as “a once-in-a-generation transformation toward human-centered computing.”
Market Position and Future Outlook
Snap’s current $12 billion valuation reflects a 90% decrease from its September 2021 peak of $116 billion. Despite this dramatic decline, Spiegel maintains confidence in the company’s “startup-style return potential.” The startup squads initiative represents Snap’s commitment to reclaiming its innovative edge.
Industry Context and Competitive Landscape
Meta and Google pursue similar AR ambitions through partnerships with Ray-Ban and Warby Parker. Therefore, Snap’s direct hardware development distinguishes its approach. The startup squads model could provide the agility needed to compete effectively against these tech giants.
Frequently Asked Questions
What are Snap’s startup squads?
Startup squads are small teams of 10-15 employees operating with autonomy to drive innovation faster.
Why is Snap implementing this restructuring?
The company faces stagnating ad revenue growth (4% in Q2) and declining North American users (-2%).
How successful is Snapchat+?
The subscription service generates $700+ million annually from 15 million paying users.
What are Snap’s AR ambitions?
The company develops Specs AR glasses, aiming to replace smartphones with “human-centered computing.”
How has Snap’s valuation changed?
The current $12 billion valuation represents a 90% decrease from its $116 billion peak in 2021.
When was this restructuring announced?
CEO Evan Spiegel revealed the startup squads initiative in a company letter on September 8, 2025.
