Cutting costs and increasing profits: Snap is cutting 1,000 jobs

The US social media group Snap is laying off around 1,000 full-time employees, including 16 percent of its global workforce. This emerges from an internal message from Snap CEO Evan Spiegel to employees, which is attached to the current report to the US Securities and Exchange Commission (SEC) on Wednesday.

Spiegel said the cuts were necessary to reduce costs and increase profitability. He referred to advances in artificial intelligence (AI), which enable Snap employees to work faster. Spiegel was convinced that “rapid advances in artificial intelligence will enable our teams to reduce repetitive tasks, increase speed and better support our community, partners and advertisers.”

Half a billion dollars in cost savings

The measure also includes the elimination of more than 300 vacancies. The job cuts and hiring freeze will reduce Snap’s annual costs by more than $500 million through the second half of the year. According to the Reuters news agency, the group employed 5,261 full-time employees in December.

Snap has invested heavily in its augmented reality glasses division Specs and plans to launch its AR glasses this year. In updated investor filings, Snap estimated that total revenue rose 12 percent to $1.53 billion in the first quarter of this year. Snap shares rose sharply after the job cuts on the New York Stock Exchange were announced; Since the beginning of the year, the share price had fallen by almost a third.

Job cuts after investor entry

The job cuts came just weeks after activist investor Irenic Capital Management acquired shares in the Snapchat parent company and called for rapid changes to improve financial performance. This also included the recommendation that Snap should reduce its workforce in order to increase its share price, writes the Bloomberg news agency.

Other large tech companies have also significantly reduced their workforces. Meta cut hundreds of jobs worldwide in March, including at Reality Labs. The Facebook Group had already cut 1,500 jobs in the department in January, while at the same time increasing investments in the area of ​​AI. Snap has also made significant headcount reductions in recent years. Due to slowing advertising revenue growth, the company laid off around 20 percent of its workforce in 2022 and another 10 percent globally in 2024.

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