Snap Inc., the parent company of Snapchat, laid off approximately 1,000 employees on Tuesday, representing 16% of its full-time workforce, as the company shifts resources toward its AR glasses subsidiary ahead of a major product launch later this year.
CEO Evan Spiegel announced the restructuring in an internal memo, describing the move as necessary to achieve “profitable growth” after what he previously called a “crucible moment” for the company. The cuts will reduce Snap’s annual operating costs by more than $500 million by late 2026, helping establish what Spiegel termed “a clearer path to net-income profitability.”
The layoffs primarily affect Snap’s traditional Snapchat operations, while its AR glasses unit, Specs Inc., will reportedly add staff before launching sixth-generation AR glasses this fall. The new device is expected to be revealed within two months, following a rollout strategy similar to Apple’s Vision Pro launch, according to a report from Alex Heath’s Sources newsletter.
Snap has also closed over 300 open positions as part of the reorganization. Affected US employees will receive four months of severance pay, healthcare coverage, equity vesting, and career transition support. International employees will receive comparable benefits aligned with local regulations.
The restructuring comes weeks after activist investor Irenic Capital Management, which holds about 2.5% economic interest in Snap, pressured the company to either spin off or shut down Specs Inc. while calling for cost cuts through layoffs and increased stock buybacks.
Despite the investor pressure, Snap appears committed to its AR glasses venture. The company recently announced a multi-year partnership with Qualcomm, which will supply Snapdragon chips for future Specs devices. Snap was unable to secure a proposed $1 billion in funding for the division, although executives reportedly hope to raise capital following the consumer product launch.
Spiegel’s memo emphasized that AI tools are enabling smaller teams to increase productivity across initiatives including Snapchat+, advertising platform performance, and infrastructure improvements.
“Rapid advancements in artificial intelligence enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers,” he wrote.
The company positioned the cuts as essential for long-term value creation, because market conditions and competitive pressures have forced a strategic realignment between its social media platform and emerging hardware ambitions.
