Snap, the parent company of social media platform Snapchat, announced Wednesday it will lay off about 1,000 employees, or 16% of its workforce. The organization became the latest to acknowledge the influence of AI in its workforce reduction decision.
In a letter to staff, CEO Evan Spiegal said rapid AI advances have enabled Snap teams to “reduce repetitive work, increase velocity and better support our community, partners and advertisers.” According to CNBC, in communication to investors Wednesday, the company emphasized it is pivoting to a leaner workforce and automated workflows, looking to “AI-driven transformation” that it anticipates will drive up profitability.
The layoffs are expected to save the company about $500 million by the end of the year.
There has been significant debate about the real impact of AI on the wave of mass layoffs in recent months, with organizations pointing to the influence of the tech to varying degrees. Pinterest, for instance, framed its layoffs as a strategic reallocation, with AI-focused roles among the areas listed as areas of further investment. Meanwhile, Oracle cited “current business needs” as the driver of its 30,000-person recent reduction, amid reports that it is investing heavily in AI data centers.
Snap’s layoff announcement was among the most straightforward: In his letter to employees, Spiegal said the company has “already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives, including Snapchat+, enhanced ad platform performance and efficiency improvements in our Snap Lite infrastructure.”
In a statement directly to retained employees, he also alluded to how AI would continue to transform the company and expectations for employees.
“Change of this magnitude and at this speed is never easy and it will not be seamless,” he wrote. “Our responsibility is to move forward with clarity, empathy and determination as we build a faster, stronger and more durable Snap for the long term.”
Despite the stated connection to AI-driven efficiencies, the layoffs also come on the heels of activist investor Irenic Capital Management’s public push for the company to boost performance. The firm, which holds a 2.5% interest in the company, has criticized Snap’s heft investment in augmented reality glasses, among other spending.
Following Wednesday’s layoff news, Snap’s stock jumped about 8%.
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