Snap Cuts 1,000 Jobs, Aims to Save $500 Million as AI Reshapes Operations

In brief

• Snap laid off approximately 1,000 team members, representing 16% of its full-time workforce.
• The cuts are expected to reduce the company's annualized cost base by more than $500 million by the second half of 2026.
• AI agents are already generating over 65% of Snap's new code and responding to over 1 million queries monthly.

Snap Inc., the parent company of Snapchat, announced significant layoffs on Wednesday as part of a major restructuring driven by its embrace of AI capabilities, cutting 1,000 jobs—about 16% of its workforce.

“Last fall, I described Snap as facing a crucible moment, requiring a new way of working that is faster and more efficient, while pivoting towards profitable growth,” Snap CEO Even Spiegel wrote in a letter to employees that was posted online. “Over the past several months, we have carefully reviewed the work required to best serve our community and partners, and made tough choices to prioritize the investments we believe are most likely to create long-term value.”

The company's AI tools are already transforming operations at scale. AI agents are generating over 65% of Snap's new code, according to CNBC, and responding to over 1 million queries per month.

"We have already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives, including Snapchat+, enhanced ad platform performance, and efficiency improvements in our Snap Lite infrastructure," Spiegel said.

The restructuring affects Snap's workforce of about 5,261 full-time employees as of December 2025, with the company also closing more than 300 open roles. Implementation costs will range between $95 million to $130 million in the second quarter.

Despite the cuts, Snap is forecasting revenue of $1.5 billion for the first quarter, an annual increase of 12%. Spiegel emphasized that "rapid advancements in artificial intelligence enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers."

The AI-driven restructuring aligns with pressure from activist investor Irenic Capital Management, which holds a 2.5% stake in Snap. The firm sent a letter to Spiegel in March recommending workforce reductions of 1,000 employees—21% of staff at the time.

"AI can and should replace many existing roles," Irenic Capital Management said in its push for the restructuring. The investor's recommendations closely match the company's announced changes.

Before the announcement, Snap's stock had dropped more than 30% year-to-date. Snap’s stock price rose about 8% from Tuesday’s close to Wednesday’s close, though is down about 1% so far on Thursday to a recent price of $5.97.