Snap to lay off 16 percent workforce amid cost-cutting push

The layoffs will impact over 1,000 employees as the company looks to reduce costs, improve profitability, and streamline operations, while increasingly leveraging artificial intelligence to enhance efficiency and support long-term growth strategies.

Social media company Snap Inc. has announced plans to lay off around 16% of its full-time workforce, affecting more than 1,000 employees, as part of a broader effort to cut costs and improve financial performance. The decision comes amid slowing advertising revenue growth and mounting pressure from investors to demonstrate a clearer path to profitability.

Chief Executive Officer Evan Spiegel said the move is aimed at reducing the company’s annual cost base by approximately $500 million. In an internal communication, he noted that the restructuring is necessary to position the company for long-term growth, despite the challenges it presents.

The layoffs will significantly reduce Snap’s workforce, which stood at over 5,000 employees prior to the announcement. In addition to job cuts, the company is also eliminating more than 300 unfilled roles as part of its cost optimisation strategy.

AI adoption and business challenges

Spiegel highlighted the growing role of artificial intelligence in improving operational efficiency, stating that advancements in AI are helping teams reduce repetitive tasks and accelerate execution. The company has already seen smaller teams utilise AI tools to drive progress across key initiatives, reflecting a broader shift toward automation and leaner operations.

Despite reporting a 12% year-on-year revenue increase to approximately $1.53 billion in its recent quarterly results, Snap continues to face headwinds. Its stock has declined sharply this year, and user growth has been impacted by regulatory restrictions on social media usage among younger audiences in some regions.

Efforts to revitalise its advertising business have delivered mixed outcomes, further prompting the company to take decisive cost-cutting measures.

Severance and employee support

Snap said affected employees will receive severance packages that include four months of pay, continued healthcare benefits, and equity vesting for eligible employees in the United States. The company will also offer career transition support to help impacted staff navigate new opportunities.

For employees outside the US, compensation and support will be aligned with local labour laws and standard practices in respective countries. The company has outlined that impacted employees in the US will receive detailed communication via email, while international teams will be guided by local leadership and human resources.

Spiegel acknowledged the contributions of departing employees, expressing gratitude for their role in building the company. The restructuring reflects Snap’s efforts to streamline operations and strengthen its financial position in an increasingly competitive and evolving digital landscape.