Cold shower for Zenly employees. In an email sent on Wednesday, September 1, Snap CEO Evan Spiegel announced the upcoming closure of Zenly, the French geolocation social network between friends bought by the American group in 2017, reports Le Figaro. An announcement that comes as Snap, publisher of the social networking giant Snapchat, announced on Wednesday, August 31, a major savings plan that includes laying off more than 1,200 of its 6,400 group employees. In fact, Zenly and its 70 employees are part of this wave of departures.
This veritable purge is due to the poor economic results recorded by Snap, which lost almost 40% of its stock market value in one month and reports a loss of $442 million in the second quarter due to the general reduction in advertising spending by advertisers. To cope, Snap has decided to refocus on growing its own app, Snapchat, which also has the Snap Map service, a Zenly-like feature. In addition, the French social network is not profitable and Snap also believes that it has the means to finance it.
A resale of Zenly is not anticipated
The news stunned the Zenly staff. Nothing suggested such an outcome as recent signs were green: employees had received Snap shares in July and his work had been praised by the group’s CEO. Above all, since its acquisition in 2017, the company’s growth has followed an exponential trajectory that has seen it go from 120,000 to 35 million active users worldwide.
Anxious not to create a new competitor, Snap does not plan to resell Zenly, Le Figaro says. As of now, the staff is awaiting the terms of the company’s closure. The Snap group claims that the employees will be accompanied by a redeployment unit. But none are expected to join the US parent company, which has partially frozen its hiring.
Snap acquired the geolocation application Zenly for 200 million dollars (179 million euros). Its very precise geolocation mobile application (to the nearest meter) allows friends to stay connected, exchange and converse with each other over the Internet, thanks to sharing their geographical position, which is shown on a map. Zenly is little used in the United States and Europe. On the other hand, the application is in the top 10 of the most downloaded social networks in Asia and in particular in Japan, a market that, however, is considered impervious to Western applications. The app has also made a name for itself in Central Europe.
Source: BFM TV
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