Snap Inc, best known for its social media platform Snapchat, will cut around 1,000 staff – or 16 per cent of its full-time workforce – as it increases its use of artificial intelligence in the search for profitability, the company announced on Thursday (AEDT).

CEO Evan Spiegel confirmed the changes in a memo to staff, which also stated the company would close “more than 300 open roles” globally.

Spiegel told staff that employees both inside and outside of the United States would be impacted, but Snap declined to comment when asked by Information Age how many Australian staff or local roles would be affected.

Snap believes “rapid advancements in artificial intelligence enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers", Spiegel told workers.

“We have already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives,” he added.

Snap’s share price rose around 7 per cent following the announcement, but remains down about 25 per cent over the year to date.

AI ‘transformation’ as Snap seeks profitability

Snap has remained largely unprofitable despite almost 15 years in business and hundreds of millions of monthly users.

In an update to investors this week on its “path to net income profitability”, the company said it was undertaking an “AI-driven transformation” which included “AI-augmented workflows” and “small, accountable teams driving rapid progress”.

More than 65 per cent of new code generated at Snap was now being created by AI, said the company, which added that it was also utilising “increasingly capable AI agents” – including to find bugs in its software.

“The headcount reduction is designed to further streamline our operations and reallocate resources toward our highest-priority initiatives, leveraging increased operational efficiencies to accelerate our path toward net-income profitability,” Snap told the US Securities and Exchange Commission (SEC) in a regulatory filing.

The company is the latest in a long line of technology firms who have attributed recent job cuts to increasing use of AI tools.

Other organisations which have recently announced AI-related cuts include Atlassian, Block, WiseTech, the Commonwealth Bank, and Amazon.


Snap CEO Evan Spiegel, seen here using the company's AR Spectacles, says AI is helping reduce team sizes and repetitive work. Image: Snap

'An incredibly difficult decision’

Snap had decided to shrink its workforce after a months-long review which focused on becoming faster, more efficient, more profitable, and “more durable”, Spiegel told staff.

“As a result of these changes, we expect to reduce our annualised cost base by more than $US500 million [$700 million] by the second half of 2026, helping to establish a clearer path to net-income profitability,” he said.

Snap told the SEC it believed the cuts would cost between $US95 million ($133 million) and $US130 million ($181 million) in severance payments and related costs.

Outgoing US-based staff would be given "four months of severance, healthcare coverage, and equity vesting, along with career transition support”, Spiegel said, while non-US staff could expect “comparable support aligned with local norms”.

“This is an incredibly difficult decision, and I am deeply sorry to the colleagues who will be leaving us,” Spiegel told employees.

“You have made important contributions to Snap, and we are committed to supporting you through this transition.

“... To everyone continuing on this journey: change of this magnitude and at this speed is never easy and it will not be seamless."