Snap Inc. shares surged on Wednesday after the company announced plans to cut up to 16% of its global workforce, citing AI-driven efficiencies and a shift toward more profitable growth, News.Az reports, citing CNBC.
CEO Evan Spiegel said in a letter to employees that the reduction would affect around 1,000 staff members, while at least 300 open roles would also be eliminated. The stock was last up 10.9% in premarket trading.
Snap, the parent company of Snapchat, said it is reallocating resources toward its highest-priority initiatives, including improving net income profitability.
Spiegel described the decision as part of a “crucible moment” for the company, requiring faster and more efficient operations while transitioning toward sustainable growth.
He said rapid advances in artificial intelligence are enabling teams to reduce repetitive tasks and increase productivity, improving performance across areas such as Snapchat+, advertising systems, and infrastructure efficiency.
The company added that it expects restructuring charges between $95 million and $130 million in the second quarter, mainly related to severance, contract terminations, and other costs. The layoffs are expected to continue into the third quarter and beyond due to regulatory requirements in some regions.
Snap also said the workforce reduction would lower its annual cost base by more than $500 million by the second half of 2026.
U.S.-based employees are expected to receive notifications shortly, while North American staff were instructed to work from home during the transition period.
