Snap To Cut 1,000 Jobs After Activist Pressure, Bets On AI Efficiency
LOADINGERROR LOADINGApril 15 (Reuters) - Snap SNAP.N will lay off about 1,000 employees, including 16% of full-time staff, the company said on Wednesday, becoming the latest tech firm to shift toward leaner teams as it ramps up AI adoption to streamline operations.The move, which also includes the closure of more than 300 open roles, comes weeks after Irenic Capital Management pushed the Snapchat parent to optimize its portfolio and improve performance.The activist investor has an economic interest of about 2.5% in the company.Advertisement Snap said advances in artificial intelligence are helping it streamline operations and operate with smaller teams, with AI generating more than 65% of new code as it assigns critical work to focused teams and AI agents.
The company had about 5,261 full-time employees as of December.The social media firm’s shares rose 5.8%.The stock has fallen about 31% so far this year.The company has invested heavily in its augmented reality glasses unit Specs, and plans to launch the product this year.However, Irenic Capital has urged it to spin off or shut the cash-burning business, citing more than $3.5 billion in investment, while also calling for broader cost cuts.Advertisement The logo for Snap Inc.
is displayed above a trading post on the floor of the New York Stock Exchange on Oct.20, 2025.AP Photo/Richard Drew“Cutting costs may appease an activist in the near term, and give long-suffering shareholders some relief, but whether it really leaves the company with a defensible business model and competitive position that it can defend, develop and turn into profits and cash flow is still unclear,” said Russ Mould, investment director at AJ Bell.Snap expects to cut more than $500 million in annualized expenses by the second half of the year, driven significantly by the recent layoffs, and broader efforts to reduce operating costs and stock-based compensation, CEO Evan Spiegel said.Gonzalo Fuentes/Pool via APAdvertisement...