Snap, Facing 'Crucible Moment,' Cuts 16% of Staff

Add Snap to the list of companies that are making deep employee cuts and citing AI as the driving force. The Snapchat parent said Wednesday it will eliminate about 1,000 jobs, or 16% of its global staff, and scrap more than 300 open positions, according to a memo from CEO Evan Spiegel filed with regulators. US employees who are cut will get four months of severance, reports Business Insider. North American staff were told to work from home for the day as the notifications roll out.

Snap framed the layoffs as part of a push toward "profitable growth" and a response to what it called a "crucible moment," with the company "squeezed between giants with enormous resources and nimble startups moving fast." It expects the cuts to trim more than $500 million from its annual costs by late 2026. Snap also highlighted the role of AI in reshaping its workforce and products, saying at least 65% of its new code already comes from AI tools. Reuters and the Wall Street Journal note the layoffs follow recent pressure on Snap from activist investor Irenic Capital Management to push up its valuation. The company's stock is down 30% this year.