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Snap announced that it’s cutting 16% of its full-time staff and closing more than 300 open roles as the company looks to streamline operations and maximize revenue.
Snap CEO Evan Spiegel announced the cuts, which will impact about 1,000 people, in a company-wide message. Spiegel’s statement outlining the various reasons for the staffing cuts was also published on the Snap blog.
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Snap announced that it’s cutting 16% of its full-time staff and closing more than 300 open roles as the company looks to streamline operations and maximize revenue.
Snap CEO Evan Spiegel announced the cuts, which will impact about 1,000 people, in a company-wide message. Spiegel’s statement outlining the various reasons for the staffing cuts was also published on the Snap blog.
As per Spiegel: “Over the past several months, we have carefully reviewed the work required to best serve our community and partners, and made tough choices to prioritize the investments we believe are most likely to create long-term value. As a result of these changes, we expect to reduce our annualized cost base by more than $500 million by the second half of 2026, helping to establish a clearer path to net-income profitability.”
Spiegel added that he expects artificial intelligence-based efficiencies to better enable the company to “reduce repetitive work, increase velocity, and better support our community, partners, and advertisers.”
“We have 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,” Spiegel said.
The company is also investing significant funds into its coming AR glasses project, which it recently spun out into its own business in order to shield Snap from any impacts if the glasses fail to resonate in the market.
Which seems like a concession of failure ahead of time. For all of its dedication to launching an AR device, which it’s been developing for more than a decade, it seems like Snapchat’s chunky AR glasses are destined to disappoint in what will soon become a crowded market for AR/AI wearables.
Snap is looking to get a first-mover advantage by launching its AR glasses this year, ahead of Meta, which plans to launch the next stage of its AI glasses in 2027. But given the popularity of Meta’s already available AI-powered sunglasses, it’s hard to see how Snap’s device will be able to gain significant traction. That’s especially true given the technical specs for Snap’s AR Specs are already inferior to Meta’s latest device.
The concern is that Snap is making an expensive bet based on dedication to a concept that Spiegel has been enamoured with for years. But by going up against much more well-resourced competition, it seems like Snap is taking a massive risk. And with user growth slowing, the company’s opportunities to significantly grow its business are limited.
Maybe, then, Snap has to take a risk, and make a push into other areas to potentially generate more money. But arguably, its own hardware business isn’t it.
Snap may be better off focusing on facilitating AR development for other platforms, and using its market leadership in AR to power new experiences for other devices.
Clearly, that wouldn’t meet Spiegel’s own ambitions for the business. But it looks like Spiegel’s dedication to his dreams for Snap could end up being its undoing.
