Snap lays off 1,000 employees, or 16% of workforce, as AI takes over 65% of coding work

Snap is cutting deeper into its workforce as artificial intelligence takes a larger role inside the company.

Snap Inc. said Wednesday it will lay off about 1,000 employees, roughly 16% of its full-time staff, marking one of its largest job reductions in recent years. The cuts come alongside the closure of more than 300 open roles, signaling a broader shift toward smaller, more focused teams powered by AI.

At the center of that shift is the speed at which automation is moving into core engineering work. Snap says AI now generates more than 65% of its new code, a figure that would have seemed unrealistic just a few years ago. The company is leaning into that momentum, assigning key projects to tighter teams supported by AI agents rather than expanding headcount.

“Snap’s shares jumped about 7% on Wednesday after the company announced plans to slash up to 16% of its global workforce, citing AI-driven efficiencies. CEO Evan Spiegel said in a letter to staff that the reduction would affect around 1,000 members of staff and that at least 300 open positions would be closed,” CNBC reported.

This isn’t Snap’s first round of cuts. In October 2024, the company laid off about 10% of its workforce, roughly 500 employees, in a move aimed at encouraging more in-person collaboration across teams. The latest cuts point to a different priority: replacing routine work with AI and operating with smaller, more focused teams.

Snap Layoffs Hit 1,000 as AI Replaces Work and Reshapes the Company

The timing is not accidental. The decision follows pressure from Irenic Capital Management, which holds about a 2.5% economic stake in the company and has pushed leadership to streamline operations and improve performance. The activist firm has been particularly vocal about Snap’s spending, including its augmented reality push.

“Last fall, I described Snap as facing a crucible moment, requiring a new way of working that is faster and more efficient, while pivoting towards profitable growth,” Spiegel wrote.

Snap has poured more than $3.5 billion into its AR glasses unit, known as Specs, which is still expected to launch this year. The business continues to lose roughly $500 million annually, and Irenic has urged the company to consider spinning it off or shutting it down entirely.

Inside Snap, the layoffs are part of a broader cost-cutting plan led by CEO Evan Spiegel. The company expects to reduce annual expenses by more than $500 million by the second half of the year, with cuts spanning operations and stock-based compensation. Layoff-related charges are projected to land between $95 million and $130 million, mostly in the second quarter.

Investors reacted quickly. Snap shares rose about 9% in premarket trading following the announcement, a sign that the market is rewarding discipline after a rough stretch. The stock is still down roughly 31% this year, trailing other social media peers.

The financial picture is mixed. Snap expects first-quarter revenue to reach around $1.53 billion, up about 12% and broadly in line with expectations. Adjusted core profit is projected at $233 million, ahead of forecasts.

The layoffs at Snap are part of a much larger pattern across the tech industry. Automation is quietly reshaping how companies build and operate. Data from Layoffs.fyi shows more than 80 tech firms have cut over 71,000 jobs this year alone, as AI takes over routine work and companies rethink how many people they actually need.

That leaves a bigger question hanging over Snap’s strategy. Cost cuts can buy time and improve margins in the near term. Whether a leaner, AI-driven structure can support long-term growth remains an open question, especially as competition intensifies across social media and AI-powered platforms.

Snap is set to report earnings on May 6. The results will offer a clearer view into whether this reset is starting to pay off—or if more changes are still ahead.