Snap to lay off 16% of workforce amid AI pivot

On Wednesday, Snap CEO Evan Spiegel sent a memo to staff announcing that the company is laying off roughly 16% of its global workforce. The restructuring is expected to impact around 1,000 full-time employees. Spiegel cited advancements in artificial intelligence as the driver for the cuts, explaining that the company believes rapid advancements in AI enable its teams to reduce repetitive work, increase velocity, and better support its community, partners, and advertisers. He noted that while these changes are necessary to realize Snap’s long-term potential, the company has already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives. These initiatives include Snapchat+, enhanced ad platform performance, and efficiency improvements in the company’s Snap Lite infrastructure.

Beyond the headcount reduction, Spiegel wrote that the company is closing more than 300 open roles. As of December 2025, Snap had 5,261 full-time employees. By implementing these cuts, the company plans to reduce its annualized cost base—defined as its total operating expenses projected over a year—by more than $500 million by the second half of 2026. The company stated that these savings will help establish a clearer path to net-income profitability.

In a presentation to investors, the company framed the decision around its competitive positioning, stating, “Snap faces a crucible moment — squeezed between giants with enormous resources and nimble startups moving fast.” To meet this moment, the company is pivoting toward profitable growth. With this move, Snap joins other technology companies that have undergone significant cuts, including Meta, Oracle, and Amazon.

For impacted employees based in the U.S., Snap is providing a severance package. The package details include:

• Four months of severance pay
• Healthcare coverage
• Equity vesting, which is the process of earning stock options
• Transition support

Why it matters

Snap’s restructuring highlights the broader tech industry trend of using AI-driven efficiency to justify workforce reductions while attempting to reach profitability in a competitive market.