Snap Inc. saw its shares climb about 7 per cent after announcing plans to cut up to 16 per cent of its global workforce, as part of a broader shift toward AI-driven operations and profitability.
The move is expected to impact around 1,000 employees, while also eliminating at least 300 open roles. Evan Spiegel, CEO, Snap, said the decision is tied to a strategic reset aimed at making the organisation faster, leaner, and more focused on high-priority initiatives.
The company plans to reallocate resources toward key areas such as its subscription offering, advertising platform, and lightweight app infrastructure. Smaller, more specialised teams will take on these priorities, supported by growing use of artificial intelligence tools.
Snap indicated that AI is already playing a significant role in its operations. Internal data shows that AI systems are generating a majority of new code and handling a high volume of internal queries. The company believes this shift will reduce repetitive work, improve efficiency, and accelerate product development.
The restructuring comes amid intensifying competition from larger technology firms and emerging startups. Snap is positioning AI as central to its transformation, aiming to improve margins and deliver sustained growth.
The layoffs are expected to result in restructuring costs between $95 million and $130 million in the near term. However, the company estimates that the changes will lower its annual cost base by more than $500 million by the second half of 2026.
Employees affected by the cuts, particularly in the US, will receive severance packages that include salary support, healthcare benefits, and assistance with career transitions.
The announcement reflects a wider trend in the tech industry, where companies are increasingly turning to AI to streamline operations, reshape teams, and drive efficiency in a competitive market.
