SAN FRANCISCO, United States — Snap Inc. has announced plans to cut about 1,000 jobs—roughly 16pc of its workforce—as the company accelerates a shift toward artificial intelligence and cost efficiency.
In a memo to staff on Wednesday, Chief Executive Officer Evan Spiegel said the restructuring will also eliminate more than 300 open roles globally, as the company seeks to streamline operations and focus on profitable growth.
Spiegel said the move is expected to save the company more than $500 million by the second half of the year, underscoring mounting pressure on the firm to improve its financial performance amid declining stock value and weak advertising growth.
The layoffs mark Snap’s fourth major workforce reduction in four years. The company cut 10pc of its staff in 2024 and a further 20pc in 2022, citing sluggish advertising revenue and broader economic headwinds.
Investor sentiment appeared to respond positively to the latest announcement, with Snap’s shares rising by 7.68pc on Wednesday. However, the stock remains down more than 30pc year-to-date, reflecting ongoing concerns about the company’s long-term profitability.
The restructuring follows pressure from activist investor Irenic Capital Management, which holds about 2.5pc of Snap’s shares and recently urged the company to cut costs and reassess its investment portfolio, including scaling back its augmented reality hardware division.
Central to Snap’s strategy is a deeper integration of artificial intelligence into its operations. According to an investor update, more than 65pc of the company’s new code is now generated using AI tools—a shift Spiegel said will “increase velocity” and better support users, partners, and advertisers.
Snap’s decision reflects a broader trend across the US tech sector, where companies are trimming workforces while increasing investment in AI infrastructure and capabilities.
Oracle Corporation has reportedly laid off thousands of employees as it channels resources into building AI data centres, while Meta Platforms is said to be planning workforce reductions of up to 20 P.c to prioritise AI model development and infrastructure.
While companies argue that AI adoption will enhance productivity and innovation, critics warn that rapid workforce reductions could deepen job insecurity and widen inequality in the sector.
For Snap, the latest cuts represent a high-stakes bet that leaner operations and AI integration will restore growth and investor confidence in an increasingly competitive digital advertising market.
