Snapchat's parent company becomes the latest technology firm to shed workers as artificial intelligence automates an increasing share of routine tasks.
Shares in Snap Inc (NYSE:SNAP) rose 8% after Wednesday's close following its announcement that it will lay off around 1,000 employees as it accelerates its adoption of artificial intelligence to streamline operations.
The cuts, representing 16% of the workforce and which include the closure of more than 300 open roles, follow pressure from activist investor Irenic Capital Management, which has called for portfolio optimisation and broader cost reductions.
Snap said AI now generates more than 65% of new code across the business, enabling it to operate with smaller, more focused teams.
Chief executive Evan Spiegel said the company expects to cut more than $500 million in annualised expenses by the second half of 2026.
Snap's move is part of a broader, accelerating trend across the technology industry, with the first quarter of 2026 seeing an extraordinary concentration of AI-driven layoffs pushing the cumulative toll for the year beyond 85,000 technology workers.
Block, the payments company led by Jack Dorsey, cut its headcount from around 10,000 to fewer than 6,000 in February, with Dorsey stating that AI tools had "changed what it means to build and run a company."
Oracle made significant layoffs in April, with estimates suggesting up to 30,000 roles could be affected, while software tools developer Atlassian cut 10% of its global workforce, citing the demands of the "AI era."
Law firm Baker McKenzie laid off between 600 and 1,000 employees as part of a shift towards AI, demonstrating that the disruption is spreading well beyond the technology sector.
Not all AI-driven restructurings have proved permanent, with Goldman Sachs research estimating that AI is eliminating around 16,000 US jobs per month on a net basis, yet a study by recruitment firm Robert Half found that 29% of companies that laid off workers after implementing AI had subsequently rehired them, a phenomenon it describes as "AI boomerangs."
Snap's shares have fallen 31% so far this year despite Wednesday's bounce, and the company is set to report full quarterly results on 6 May.