Snap Inc. Snapchat is laying off 16 percent of its employees, about 1,000 people, as CEO Evan Spiegel says the Snapchat owner faces a “defining moment” as he tries to find a path to sustainable profitability.
Spiegel announced the significant cuts in a memo to employees early Wednesday morning, adding that the staff cuts will reduce the company’s annual cost base by more than $500 million by the end of this year, while incurring $95 million-$130 million in restructuring costs.
The CEO added that he believes adopting AI tools will allow the company to move faster and ship more products, with the new “jobs to be done” structure aggressively promoting AI customers:
“While these changes are necessary to realize Snap’s long-term potential, we believe that rapid advances in AI enable our teams to reduce repetitive work, increase speed, and better support our community, partners, and advertisers,” Spiegel wrote. “We’ve already seen small teams leveraging AI tools to drive measurable progress across several important initiatives, including Snapchat+, improved ad platform performance, and efficiency improvements to our Snap Lite infrastructure.”
The company says 65 percent of the new code was generated by artificial intelligence.
The company also released an investor presentation focusing on three key growth areas: focusing growth investments in monetizable markets, increasing paid subscriptions to Snapchat+, and creating more higher-margin ad placements.
The company says revenue will be $1.529 billion in the first quarter, with adjusted EBITDA of $233 million.
You can read Spiegel’s memo to staff below.
topic: Regulatory changes at Snap
My dear team,
Today we’re announcing changes that will impact nearly 1,000 Snap team members, including 16% of our full-time employees, as well as the closure of more than 300 open positions. This is a very difficult decision, and I am deeply sorry to the colleagues who will be leaving us. You’ve made important contributions to Snap, and we’re committed to supporting you through this transformation.
Last fall, Snap was described as facing a challenging moment, requiring a new way of working that is faster and more efficient, with a focus on profitable growth. Over the past few months, we have carefully reviewed the work needed to better serve our community and partners, and made difficult choices to prioritize investments that we believe are most likely to create long-term value. As a result of these changes, we expect to reduce our annual cost base by more than $500 million by the second half of 2026, helping to create a clearer path to bottom-line profitability.
While these changes are necessary to realize Snap’s long-term potential, we believe that rapid advances in AI enable our teams to reduce repetitive work, increase speed, and better support our community, partners, and advertisers. We’ve already seen small teams leveraging AI tools to drive meaningful progress across several important initiatives, including Snapchat+, improved ad platform performance, and efficiency improvements to Snap Lite’s infrastructure.
If you are part of our North American team, please work from home today. In the US, affected team members will receive an email notification within the next hour, including information about next steps. For locations outside the US, you will receive additional details about next steps from leadership and HR.
To our departing colleagues: Thank you. Your hard work has helped shape Snap, and we’re so grateful for your contributions. For US-based team members who are leaving, we will provide four months of severance pay, health care coverage, and stock vesting, along with career transition support. Outside the United States, we will follow local processes and seek to provide similar support consistent with local standards.
To everyone who is continuing this journey: Change of this magnitude and speed is never easy and will never be smooth. We thank you for your resilience, compassion, and commitment to each other, to the community, and to the partners we serve. Our responsibility is to move forward with clarity, compassion, and persistence as we build a faster, stronger, and more durable Snap for the long term.
Ivan
