Snapchat plans to lay off approximately 16% of its
global full-time employees – about 1,000 jobs – as the social media company embraces advancements in AI to cut overhead costs during its “crucible moment.”
“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,” Snap CEO
Evan Spiegel writes in a letter addressed to employees.
As a result of cutting 1,000 jobs, along with
closing more than 300 open roles, Spiegel expects to reduce the company’s annualized cost base by over $500 million by the second half of this year, which he believes will “establish a
clearer path to net-income profitability.”
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“While these changes are necessary to realize Snap’s long-term potential, 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,” the executive
added.
Spiegel says that he has already witnessed AI progressing Snap’s user offering, citing the company’s Snapchat+ subscription service, which now has over 15 million
users, as well as enhanced ad platform performance.
This past September, Spiegel shared an open letter addressing the 14-year-old social media platform’s “crucible moment” in regards to slowing ad
revenue and other struggles. Since then, Snapchat has improved
its ad business, but is still focused on pivoting its overall strategy to prioritizing profitable growth.
Snap’s upcoming wave of job cuts follows other tech giants
in the social media space, specifically Meta, which continues to lay off employees as it focuses more of its spending on AI investment.