LinkedIn has entered 2016 on the back foot after the company’s financial director admitted the global economic downturn was responsible for poor revenue and profit forecasts for the first quarter.
The online global professional network suffered a 28 per cent slump in sales in the hours after announcing lower than expected revenue and profit forecasts.
LinkedIn’s finance director, Steve Sordello, attributed the pressure the company was facing in Europe, the Middle East, Africa and the Far East to the “current global economic conditions.”
Advertising was flagged as a cause for concern after the company reported a 20 per cent rise in ad revenue which is its slowest in more than two years.
Growing competition from Google is likely to have squeezed its ad revenue, however the decision to phase out an online ad product called Lead Accelerator in the first half of 2016 is estimated to have reduced it by at least £34m ($50m).
LinkedIn said the decision to do so was because it “required more resources than anticipated”.
The company has been investing heavily in global expansion by buying firms and hiring sales staff in an attempt to grow in China and other markets outside the US.