Snap’s stock jumps on plans to axe 16% of its workforce citing AI efficiencies

CNBC reports Snap Inc. is looking to reduce global headcount by 16%, citing efficiencies from AI. Snap’s shares jumped 7% on the announcement. 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. .

“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. “We believe that rapid advancements in artificial intelligence enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers.

“We have already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives, including Snapchat+, enhanced ad platform performance, and efficiency improvements in our Snap Lite infrastructure.”

The social platform plans to assign work to smaller, highly focused teams while increasing AI agent capabilities. It reported that AI agents are already generating over 65% of its new code and responding to over 1 million queries per month.

Restructuring costs are expected to be around $95 million to $130 million in the second quarter, with the layoff process expected to continue into the third quarter and beyond due to role elimination being subject to local law requirements.

Spiegel said that the layoffs would reduce the company’s annualized cost base by more than $500 million by the second half of 2026. Snap is forecasting revenue of $1.5 billion for the first quarter, an annual increase of 12%.