TikTok Forced To Cut Global Ad Revenue Target By $2 Billion After Slumping Sales And Extravagant Spending

TikTok may be one of the most trending apps in the social media world but it’s been going through some tough times recently.

The firm just announced how it would be reducing its global ad revenue target by nearly $2 billion in response to the declining sales, as explained by the Financial Times through a report that was published on Wednesday.

TikTok’s CEO blamed its employees for not performing well enough to reach the target set out by the company initially. But a recent report by the Financial Times mentioned how the firm is at fault too as it was overspending on luxury endeavors like swanky events and high salaries.

As mentioned by four different sources that spoke to the Final Times, the CEO called out his workers for poor performance in sales and in the world of e-commerce and advertising. This is where they claim a huge chunk of the app’s profits arises. All the announcements were made during an all-hands meeting during the latter part of September.

The sources revealed how TikTok should also take a little bit of responsibility on its shoulders too instead of just dumping the blame on workers. A great example put forward was how the app offers junior employees salaries reaching the six-figure mark, just so it could sweep them away from archrivals in the industry.

TikTok has been really struggling financially to reach its set of goals and many experts and critics think huge spending on such large events isn’t a good idea. Two internal sources that are close to the organization mentioned how it was spending close to $2.9 million on some internal events taking place in Spain called ‘Evolve’.

In the same way, it’s shocking to see how the firm has gone as far as flying out some major teams to world events and enabled them to stay at swanky places, giving rise to a costly luxe affair.

In September of 2022, a lot of European staff members flocked on over to Barcelona for an expensive event and after that, the team flew to the US. The cycle of expensive traveling and grand events continued.
With time, TikTok’s earnings really wanted to grow and the app started to struggle in terms of meeting the forecasted ad revenue targets in 2022. This projection forecasts nearly $10 billion in terms of revenue and that’s a mega 30% decline from the original set out goal which was $12 billion to $14.5 billion.

These changes come as the firms start to slash their budgets for advertising and prepare for a mega downturn in the market of today. And as we’re witnessing some of the biggest tech giants carry out their firing sprees to put down costs, it’s a picture that speaks a thousand words.

For now, TikTok is yet to answer any questions on how it plans to further bring down costs during this period of uncertainty.

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