Snap Co., Ltd.The Santa Monica-based social media company announced in mid-April that it would lay off about 1,000 employees and close 300 open positions at the company. Approximately 16% of the layoffs will affect full-time employees.
In a letter to staff, Snap’s co-founder and CEO said: Evan Spiegel The company said it will use artificial intelligence to improve company performance. Improved performance and reduced annual costs by $500 million by year-end. Currently, 65% of Snap’s code is generated by AI.
“We believe rapid advances in artificial intelligence will allow our team to reduce repetitive work, increase speed, and better support our communities, partners, and advertisers,” Spiegel said. “We are already seeing small teams leveraging AI tools to drive meaningful progress on several important initiatives.”
Snap previously laid off about 2,000 employees, or about 30% of its workforce, from 2022 to 2025, according to the Tech Unemployment Tracker. layoff.fyi. Nevertheless, Irenic Capital ManagementAn activist investor who owns 2.5% of the company’s stock asked for more. In an investor letter issued at the end of March, Irenic said Snap had more than 5,200 employees at the end of March, up from about 3,000 before the coronavirus pandemic.
“Like many of your colleagues, you were overemployed. Unlike your colleagues, you have not corrected your course,” Ilenich said in a letter to Der Spiegel. “Meta’s ‘Year of Efficiency’ resulted in (approximately) 25% reduction in workforce and nearly 20% increase in EBITDA margins.”
The job cuts are part of a broader restructuring plan for Snap, which has yet to have a profitable year since it was founded in 2011. Now, the company is trying to get back on track. Snap reported strong fourth-quarter profits in February, announced a number of subscriptions to improve its direct revenue stream, and is working to create an independent subsidiary for its augmented reality goggles Spex.
Irenic is referring to Spiegel’s job cuts announcement as a “crucible moment” in which Spiegel acknowledged the company’s continued poor financial performance in an open letter to shareholders published in September.
“Last fall, I explained that Snap was facing a melting pot moment, requiring new ways of working that were faster and more efficient while aiming for profitable growth,” Spiegel said in a letter to employees. “Over the past few months, we have carefully considered the work needed to best serve our communities and partners and made tough choices to prioritize investments that we believe are most likely to create long-term value.”
The fruits of that crucible moment were beginning to bear fruit in February’s Q4 2025 financial results announcement. Snap reported revenue of $1.7 billion for the quarter, a 10% increase from the same period last year. The company also announced net income of $45 million, up from $9 million in the same period in 2024.
“Last fall, we embarked on a new chapter for our company, underscoring the crucible moment facing our business,” Spiegel said on the company’s earnings call. “…The impact of our strategic direction began to show in the results of our business in the fourth quarter, and we are excited to build on this momentum in the year ahead.”
Snap stock has been steadily rising since the end of March, and the stock closed at $5.84 per share on Wednesday.
Conspicuously missing from the company’s 2026 financial outlook was Snap’s $400 million deal with an AI startup. perplexed. The partnership, announced in November, will give Perplexity access to Snap’s 950 million monthly active users and give users the ability to provide conversational answers without leaving the app. In return, Perplexity will pay Snap $400 million annually. This was the first of many outsourced AI integrations Snap said it planned.
Still, “we have not yet mutually agreed on a path for broader deployment,” Spiegel said during the earnings call.
