In a significant move, Snap Inc., the parent company behind Snapchat, announced on Wednesday that it will lay off 1,000 employees—approximately 16% of its workforce—as part of a strategic restructuring influenced by advancements in artificial intelligence. This decision is aimed at achieving $500 million in savings.
Snap CEO Evan Spiegel explained to employees via an online letter that the company is undergoing a critical period requiring more efficient operations and a shift towards profitable growth, as described last fall. “We have meticulously evaluated our tasks to best serve our community and partners, making challenging decisions to focus on investments likely to drive long-term value,” he stated.
The integration of AI tools at Snap has already begun transforming its operations significantly. According to CNBC, AI agents are now responsible for generating over 65% of the company’s new code and handling more than 1 million queries monthly.
“We have seen small teams effectively use AI to make substantial progress on several key projects, including Snapchat+, improved ad platform performance, and efficiency enhancements in our Snap Lite infrastructure,” Spiegel noted.
These restructuring efforts will impact Snap’s workforce of approximately 5,261 full-time employees as reported in December 2025. Additionally, the company plans to close over 300 job openings, with implementation costs projected between $95 million and $130 million for the second quarter.
Despite these layoffs, Snap anticipates first-quarter revenues of $1.5 billion, marking a 12% annual growth. Spiegel highlighted that “rapid advancements in artificial intelligence enable our teams to reduce repetitive tasks, increase speed, and better serve our community, partners, and advertisers.”
The restructuring aligns with suggestions from activist investor Irenic Capital Management, which holds a 2.5% stake in Snap. The firm urged Spiegel in March to cut about 1,000 jobs—21% of the workforce at that time—to embrace AI-driven efficiency.
“AI can and should replace many current roles,” stated Irenic Capital Management, whose recommendations closely mirror Snap’s announced changes.
Before this announcement, Snap’s stock had declined over 30% year-to-date. However, following the news, Snap’s share price rose approximately 8% from Tuesday to Wednesday but fell about 1% by Thursday, closing at $5.97.
Similar cost-cutting strategies have been observed in the tech industry recently, as reported by Decrypt. Meta faced scrutiny over job reductions during broader sector layoffs, while Jack Dorsey’s payments company Block announced the elimination of more than 4,000 jobs—40% of its workforce—in February, also attributing these cuts to AI’s ability to assume previous human responsibilities.