Snap announces massive layoffs after collapse of Perplexity deal

Artificial intelligence was linked to an estimated 50,000 layoffs in 2025, and just this year, Amazon, Atlassian, Pinterest, Block, and Fiverr have announced layoffs linked to AI. Now, you can add Snap to the list.

In a memo to Snap employees posted on Wednesday, billionaire CEO Evan Spiegel said the company is laying off about 1,000 employees, or 16 percent of its workforce. As part of these cuts, 300 open roles have also been eliminated. Spiegel told North American employees to work from home on Wednesday, telling them they would find out if they were impacted imminently.

The memo to employees cited the importance of artificial intelligence, and Spiegel said the company would reduce its annual costs by $500 million by the end of the year.

Last fall, I described Snap as facing a crucible moment, requiring a new way of working that is faster and more efficient, while pivoting towards profitable growth....While these changes are necessary to realize Snap’s long-term potential, we believe that rapid advancements in artificial intelligence enable our teams 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.

The company has said that it uses AI to generate code and improve efficiency, but it's also worth noting that activist investor Irenic Capital Management (which holds 2.5 percent of the company) called on Snap to make cuts last week and better use AI, according to Reuters.

It's also important to mention that Snap's much-publicized $400 million partnership with AI firm Perplexity has also fallen through, according to tech reporter Alex Heath's Sources newsletter. If the deal had gone through, Perplexity would have given Snap a combination of cash and equity to integrate Perplexity's AI search into the Snapchat app.

If nothing else, AI eliminating human jobs is no longer a purely hypothetical threat, but a grim reality for workers in the tech sector.