Snap Inc., the parent company of Snapchat, announced significant layoffs on Wednesday, cutting 1,000 jobs, about 16% of its workforce, as part of a major restructuring driven by its embrace of AI capabilities.
Snap CEO Evan Spiegel stated the company is pivoting towards profitable growth and has made tough choices to prioritize investments for long-term value. The company's AI tools are transforming operations at scale, with AI agents already generating over 65% of Snap's new code and responding to over 1 million queries monthly.
The restructuring affects Snap's workforce and includes closing over 300 open roles. Implementation costs are estimated between $95 million to $130 million in the second quarter.
Snap forecasts first-quarter revenue of $1.5 billion, an annual increase of 12%. Spiegel emphasized that AI enables teams to reduce repetitive work, increase velocity, and better support the community, partners, and advertisers.
The AI-driven restructuring aligns with pressure from activist investor Irenic Capital Management, which recommended workforce reductions. Before the announcement, Snap's stock had dropped over 30% year-to-date, but rose about 8% following the news.