Snap lays off 1,000 employees and puts hiring on pause, cites AI as reason

Snap Inc, the parent company of Snapchat, has announced another major round of layoffs, with the company set to cut around 16 per cent of its global workforce. The move, which will impact roughly 1,000 employees, is aimed at improving efficiency and positioning the company for long-term growth as it leans more heavily into artificial intelligence (AI) and augmented reality (AR).

According to a memo sent to employees by CEO Evan Spiegel, and reported by The Verge, the cuts are part of a broader effort to restructure the business and focus on areas that can drive future value. Spiegel said the changes are “necessary to realise Snap’s long-term potential”, adding that advancements in AI are already helping reduce repetitive work, improve efficiency, and accelerate product development across teams.

“Today we are announcing changes that will impact approximately 1,000 team members at Snap, including 16% of our full time employees, in addition to closing more than 300 open roles,” wrote Spiegel in the memo to Snap employees.

At the same time, Snap is also freezing hiring of more than 300 open roles as part of the restructuring across several teams.

Meanwhile, affected employees will receive severance support as part of the transition. According to the memo, US-based staff will be offered around four months of severance pay, along with continued healthcare coverage. Snap will also provide equity vesting and career transition support to help employees navigate the change. For employees outside the US, the company said it will offer comparable benefits in line with local labour laws and practices.

The memo also highlights Snap’s ongoing shift away from its legacy social media operations towards its AR ambitions, now housed under a subsidiary called Specs Inc. While the layoffs will impact multiple teams, the company is continuing to invest in AR, with hiring underway for roles tied to Lens Studio and immersive experiences.

The news comes at a time when Snap is doubling down on hardware and immersive tech to compete with players like Meta and Alphabet, both of which are investing heavily in wearables and mixed reality ecosystems. Snap has already spent over $3 billion on AR development over the past decade, and the next generation of its AR glasses is expected to launch later this year.

No Perplexity deal for Snap?

Alongside the layoffs, Snap has also reportedly faced setbacks in its AI ambitions. A proposed $400 million integration deal with Perplexity AI reportedly fell through after disagreements over terms. The partnership, which was expected to bring an AI-powered answer engine into Snapchat, highlights the challenges Snap faces as it tries to expand beyond advertising into new revenue streams.

Layoffs so far

However, layoffs are not new for Snap. The company has been trimming its workforce repeatedly over the past few years as it adjusts to slowing ad growth and shifting priorities. In February 2024, Snap cut around 10 per cent of its staff, impacting roughly 500 employees, in a move aimed at reducing organisational layers and improving collaboration.

Earlier, in November 2023, the company carried out a smaller round of layoffs focused on product teams, while in September 2023 it shut down its AR Enterprise division, cutting about 170 roles. Its largest restructuring came in August 2022, when Snap laid off 20 per cent of its workforce—around 1,300 employees—and scrapped several projects, including its Pixy drone and Snap Originals content initiatives.