Snapchat announced it is cutting about 1,000 jobs, representing 16% of its total workforce, as part of a broader plan to reduce costs and accelerate the adoption of artificial intelligence tools.
CEO Evan Spiegel said the company is at a critical moment, stressing that shifting to smaller, more efficient teams powered by AI is key to boosting productivity and reducing repetitive work.
Details
Snapchat plans to reduce its annual expenses by more than $500 million and eliminate over 300 roles it had planned to fill.
- The company is increasingly relying on AI, with more than 65% of its code now generated using these tools.
- Management believes smaller, tech-enabled teams can handle work that once required much larger groups.
- The move follows pressure from activist investor Irenic Capital, which criticized the company’s lack of profitability despite being in business for 15 years.
- Snapchat’s stock rose about 9% after the announcement but remains down more than 30% since the start of the year.
- This marks the third major round of layoffs since 2022, following a 20% workforce cut and additional reductions in 2024.
- Snapchat joins a broader wave across the tech sector, where major companies have cut thousands of jobs this year as AI adoption accelerates.
What’s Next?
Focus is now shifted to Snapchat’s upcoming results and whether it can deliver sustainable profitable growth, as more tech companies are expected to continue cutting jobs amid rapid AI adoption.
