Snap on Wednesday announced plans to eliminate about 1,000 jobs, including 16 percent of its full-time staff, as the company seeks to lower costs and increase its reliance on artificial intelligence.
In a memo to employees, Evan Spiegel, Snap’s chief executive, said the company, based in Santa Monica, Calif., was also eliminating more than 300 roles it had planned to fill. The cuts are an attempt to find a path to profitability, he added, as Snap plans to reduce costs by more than $500 million by the second half of this year. It was unclear whether the 1,000 job cuts included some held by part-time employees.
“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,” Mr. Spiegel added in the memo.
Investors embraced the decision, sending Snap’s stock up about 9 percent in early trading Wednesday to more than $6 a share. Still, the company’s stock price is down more than 30 percent since the beginning of the year.
Snap joins a flood of tech companies announcing staff cuts as they say A.I. can take over more of the work and improve efficiency. While many computer programmers view A.I. as a tool rather than a replacement, tech company executives have pushed the belief that the technology will continue to rapidly improve and reduce the need for humans.
Nearly 90 tech companies have eliminated at least 70,000 jobs this year, according to Layoffs.fyi, which tracks job cuts in the industry. The financial services company Block, which owns Square, Cash App and Tidal, laid off about 4,000 employees in February, or about 40 percent of its work force, citing its embrace of A.I.
In an investor update on Wednesday, Snap said more than 65 percent of its code was now generated by A.I.
“A.I. gives small, creative teams the ability to do the work that once required much larger organizations,” the update added.
The layoffs at Snap follow pressure last month from the activist investor Irenic Capital Management, which owns about 2.5 percent of the social media company’s shares. In a letter to Snap, Irenic criticized the company for overhiring and said it should rein in costs. Irenic also criticized Snap’s $3.5 billion investment in its A.I.-powered Specs glasses, which has yet to deliver strong returns. Irenic urged Snap to focus on using A.I. to find gains.
Snap had 5,261 full-time employees in December. It previously reduced staff by 10 percent in 2024, and in 2022 cut about 20 percent of its employees, citing slowed advertising revenue growth.
The company, which will report its first-quarter earnings on May 6, said it was expecting revenue to grow 12 percent to $1.53 billion year over year. Snap expects to incur up to $130 million in layoff-related costs in its second quarter, according to a filing with the Securities and Exchange Commission.
Kalley Huang contributed reporting.
