Snap Inc. Lays Off 1,000 Employees to Pivot Toward AI

On April 15, 2026, Snap Inc. announced the layoff of approximately 1,000 employees, representing about 16% of its global full-time workforce. CEO Evan Spiegel also closed more than 300 open roles as part of a restructuring effort to accelerate a shift toward artificial intelligence. The company noted that AI now generates more than 65% of its new code, allowing teams to reduce repetitive work and increase operational velocity. This pivot aims to reduce the annualized cost base by more than $500 million by the second half of 2026.

The decision follows pressure from activist investor Irenic Capital Management, which holds a 2.5% stake and advocated for cost-cutting and the optimization of the company's portfolio. Specifically, the investor targeted the Specs augmented reality glasses project. Snap is restructuring to separate the legacy Snapchat business from Specs, a subsidiary focused on AR hardware. The company also recently saw a $400 million integration deal with AI firm Perplexity collapse. Despite the layoffs, Snap reported a 12% year-over-year increase in Q1 revenue to approximately $1.53 billion.

Following the announcement, Snap's stock rose nearly 8%. However, Spiegel faced public backlash after images surfaced of him attending the Coachella Valley Music and Arts Festival shortly before the layoffs were announced. The company expects to incur between $95 million and $130 million in severance charges, with U.S. employees receiving four months of severance and healthcare coverage.