Snap Inc. Cuts 1,000 Jobs as AI Takes Over 65% of Code Generation
Snap Inc. has announced a significant reduction in its global workforce, laying off approximately 1,000 employees. This move, which accounts for about 16% of the company’s total staff, marks one of the largest AI-driven workforce reductions in the tech industry to date. CEO Evan Spiegel attributes this decision to the “rapid advancements in artificial intelligence” which allow smaller teams to work with greater speed and efficiency.
The company has revealed a striking milestone: AI now generates more than 65% of its new code. This fundamental shift in operations has led to “small squads leveraging AI tools to drive meaningful progress across several important initiatives,” as Spiegel noted in a staff memo.
The restructuring is projected to reduce Snap’s annualized costs by over $500 million by the second half of 2026. The affected U.S. employees will receive four months of severance, healthcare coverage, and equity vesting. In addition to this, Snap has announced the closure of more than 300 open positions.
Despite the layoffs, Wall Street responded positively to the announcement. Snap shares saw an increase of approximately 7% in early trading on Wednesday. However, the stock remains down by more than 30% year-to-date, as the company faces stiff competition from TikTok and other social media platforms.
Source: CNBC