• TikTok’s CEO blamed staff for not making enough advertising and e-commerce sales, the Financial Times reported.
  • But TikTok sources told the FT the company’s spending was partly to blame for the drop in ad revenue.
  • TikTok employees said the company was burning money on high salaries and expensive parties.

TikTok cut its global ad revenue target by around $2 billion in response to falling sales, sources told the Financial Times in a report on Wednesday.

And while TikTok CEO Shou Zi Chew blamed employees for their underperformance, sources told the Financial Times that the company was also responsible for spending money on inflated wages and salaries. classy evenings.

According to four sources speaking to the Financial Times, the revised guidance came after Chew called out employees for a lack of sales in advertising and e-commerce – where the bulk of the social platform’s profits come from – during of a virtual meeting with bare hands at the end of September.

But the sources said the ByteDance-owned company is also to blame for the downward projection, saying TikTok was offering junior employees six-figure salaries to poach talent from competitors.

Spending on big social events can be another reason TikTok struggles to meet revenue goals. Two sources with knowledge of TikTok’s budgets told the FT that the company allegedly spent $2.9 million on an internal event called “Evolve” held in Spain.

The company also reportedly flew teams around the world to attend events at luxury venues and hotels, according to the FT. At the end of September, European staff flocked to a party in a town near Barcelona. A month later, the US trade team was flown to New Orleans and, in late October, the Latin America team was flown to Sao Paulo, the FT reported.

Even though TikTok’s overall revenue continues to grow, the platform has struggled to meet its projected advertising revenue targets this year. The updated projection calls for revenue of $10 billion, down 30% from its original revenue target of $12 billion to $14.5 billion.

The changes come as companies begin to cut advertising budgets to prepare for a market downturn, and rivals like Meta and Snap begin to make mass layoffs in an attempt to cut costs.

TikTok did not respond to Insider’s request for comment at the time of publication.