Snap Inc., the Santa Monica-based social media company, announced mid-April it would lay off around 1,000 workers and close 300 open positions at the company. Around 16% of the layoffs would impact full-time employees.
In a letter to staff, Snap’s Co-Founder and Chief Executive Evan Spiegel said the company will be using artificial intelligence to boost the company’s performance, reducing its annual costs by $500 million by the end of the year. As it stands, 65% of Snap’s code is generated by AI.
“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,” Spiegel said. “We have already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives.”
Snap previously laid off around 2,000 employees – around 30% of its workforce – between 2022 and 2025, according to tech jobless tracker Layoffs.fyi. Nonetheless, Irenic Capital Management, an activist investor that owns 2.5% of the company’s shares, pushed for more. In a letter from the investor, published at the end of March, Irenic said Snap had around 3,000 employees before the Covid-19 pandemic and more than 5,200 employees by the end of March.
“Like many of your peers, you over-hired. Unlike your peers, you haven’t course corrected,” Irenic said in a letter to Spiegel. “Meta’s ‘Year of Efficiency’ led to a reduction of (about) 25% of the workforce and increased EBITDA margins by nearly 20 percentage points.”
The layoffs are part of a broader restructuring plan at Snap, which since forming in 2011 has yet to see a profitable year. Today, the company is attempting to get back on track. Snap reported positive fourth-quarter earnings in February, unveiled a slew of subscriptions to improve the company’s direct revenue stream and is working on a standalone subsidiary for its augmented reality goggles called Specs.
‘The Crucible Moment’
Referenced by Spiegel’s layoffs announcement and Irenic is “The Crucible Moment,” a public letter to shareholders published in September in which Spiegel acknowledged the company’s ongoing poor financial performance.
“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 said in a letter to employees. “Over the past several months, we have carefully reviewed the work required to best serve our community and partners, and made tough choices to prioritize the investments we believe are most likely to create long-term value.”
During its 2025 fourth-quarter earnings call in February, the results from that crucible moment were beginning to come to fruition. Snap reported $1.7 billion in revenue for the quarter, a 10% year-over-year increase. It also announced a net income of $45 million, up from $9 million during the same time period in 2024.
“Last fall, we embarked on a new chapter for our company with the articulation of the Crucible Moment faced by our business,” Spiegel said during the company’s earnings call. “…the impacts of the strategic direction began to manifest in the operating results of our business in Q4, and we are excited to build on this momentum in the year ahead.”
Snap shares have steadily been climbing since the end of March, and stock price closed at $5.84 a share on Wednesday.
What was noticeably missing from the company’s fiscal outlook for 2026 was Snap’s $400 million deal with AI startup Perplexity. The partnership, announced in November, would give Perplexity access to Snap’s 950 million monthly active users and provide them conversational answers without users having to leave the app. In return, Perplexity would pay Snap $400 million a year. It was the first of what Snap said would be many outsourced AI integrations.
And yet, “we have yet to mutually agree on a path to a broader rollout,” Spiegel said during earnings.
