Snap Inc. has officially confirmed that it will lay off approximately 1,000 full-time employees, representing 16% of its global workforce. CEO Evan Spiegel stated in an internal memo that this was a difficult but necessary step toward the company's long-term survival and profitability.

In addition to direct layoffs, the company has also decided not to fill more than 300 open positions. This means that the total number of planned employees at Snap has been reduced by nearly a quarter, reflecting the company's determination to pursue streamlined operations in a competitive environment.

AI-Driven Productivity Transformation

Spiegel explicitly linked the layoffs to advances in AI technology for the first time, noting that smaller teams can now accomplish more work. Over 65% of Snap's new code is currently generated by AI, and automation tools handle millions of customer service inquiries each month.

By leveraging AI tools, Snap's small teams have achieved significant breakthroughs in subscription services and advertising platform performance. This technological benefit has allowed the company to reduce repetitive tasks and significantly improve the efficiency of software error fixes and system maintenance.

Striving for Annual Profitability

This restructuring is expected to cut costs by more than $500 million annually for Snap before the end of 2026. The news boosted Snap's stock, which rose about 9% in early trading on Wednesday, as the market recognized the company's cost-cutting and efficiency-enhancing measures.

Despite the pressure from industry giants like Meta and Amazon, as well as competition from startups, Snap has raised its revenue forecast for the first quarter. The company is trying to transition through AI technology from a labor-intensive model to a more competitive, technology-intensive structure.