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Short-term layoffs: Snap, the parent company of messaging app Snapchat, announced Wednesday that it is laying off 1,000 employees to cut costs. The Santa Monica-based social media company is cutting 16% of its full-time workforce and eliminating more than 300 open positions. The cuts will reduce Snap’s annual cost base by more than $500 million through the second half of this year.
Snap is the latest tech company to cite efficiencies from artificial intelligence as it cuts jobs and pulls back hiring. Tech companies like Meta, Block, Amazon, Oracle and others have laid off employees this year.
Short-term layoffs: What did CEO Evan Spiegel say?
“Over the past few months, we have carefully considered what work is needed to best serve our community and partners and have made difficult decisions to prioritize the investments we believe are most likely to create long-term value,” Spiegel said in a memo to employees Wednesday.
The memo also notes that Snap employees are using artificial intelligence tools to “drive meaningful progress” on several initiatives, such as Snapchat Plus, a subscription service that gives users early access to new features and ways to customize the app. “While these changes are necessary to realize Snap’s long-term potential, we believe rapid advances in artificial intelligence will enable our teams to reduce repetitive work, increase speed and better support our community, partners and advertisers,” Spiegel said.
Short-term layoffs: What role did activist investors play?
Snap’s layoffs also come after activist investor Irenic Capital Management took a stake in the company and called for cost cuts through layoffs and other measures. Activist investor pressure appears to have accelerated the restructuring timeline.
Short-term layoffs: how much will the restructuring cost?
Snap said its restructuring efforts are estimated to cost between $95 million and $130 million due to severance payments, contract termination costs and other costs. Despite the upfront costs, the company expects annual savings to exceed $500 million.
Short-term layoffs: What challenges does Snap face?
Outside of its finances, Snap faces other hurdles. Like other social media companies, Snap has faced criticism for not doing enough to protect teens’ mental health and mitigate potential harms such as illegal drug sales.
The company revolutionized social media by popularizing vertical videos and disappearing posts, but competitors like Meta-owned Instagram copied its features. Snap has also bet on smartglasses, but it’s been an uphill battle convincing consumers to buy them. The company plans to start selling its augmented reality glasses to consumers later this year, taking on rivals such as Meta, Google and Apple.
Snap layoffs: What is Snap’s financial health?
On average, more than 940 million people use Snapchat every month. Even as the company has inched closer to reaching one billion users, it has struggled to turn a profit. Despite efforts to get people to pay subscription fees and buy glasses, Snap still makes most of its money from digital advertising.
In 2025, Snap’s annual revenue totaled $5.93 billion, up 11% compared to 2024. The company reported a net loss of $460 million, compared to the $698 million net loss Snap had in 2024. Over the past five years, Snap’s share price has fallen about 90% as investors have become more cautious about a possible turnaround. On Wednesday, shares of Snap rose about 5% following the announcement of the layoffs.
FAQs: Layoffs at Snap
Q: How many employees is Snap laying off?
A: 1,000 employees, which is 16% of the full-time workforce.
Q: How much will the layoffs save?
A: More than $500 million per year through the second half of this year.
Q: What are the estimated restructuring costs?
A: Between $95 million and $130 million for severance pay, contract termination and other costs.
Q: Why is Snap citing AI in layoffs?
A: Spiegel said rapid advances in AI are enabling teams to reduce repetitive work and increase speed.
Q: Which activist investor pushed for cuts?
A: Irenic Capital Management became involved and called for layoffs and other cost-cutting measures.
Q: How many people use Snapchat monthly?
A: On average, more than 940 million people use Snapchat every month.
Disclaimer: This information is based on input from news agency reports. TSG does not independently confirm the information provided by relevant sources.
