Snap, the company behind Snapchat, is laying off around 1,000 employees. That includes about 16% of its full-time staff. This is in an effort to lower costs while using AI to boost productivity with smaller teams.
Surprisingly, this comes less than a week after Snap announced an extended collaboration with Qualcomm and its Snapdragon XR solutions. Announcing that Qualcomm would power future generations of Specs.
Snap says that advances in artificial intelligence are allowing the company to streamline its operations, reducing repetitive work and operating with smaller teams. This is part of a broader push to improve efficiency. Which is exactly what Irenic Capital Management pushed Snap to do. This activist investor has about a 2.5% interest in the company.
Snap is the latest company to lay off humans in favor of AI
Snap isn’t the first company to lay off a significant chunk of its employees, and is planning to replace them with AI. And they definitely won’t be the last. These include Pinterest, Meta, Autodesk, Amazon, The Washington Post, Home Depot, Nike, and many more.
Since AI started to take over and progress pretty quickly, we were all worried about it taking our jobs. And that appears to be happening now, sooner than we expected. But companies can’t get rid of everyone and replace them with AI, fortunately.
Snap is expecting its first-quarter revenue to rise about 12% to around $1.53 billion. And it’s expecting to have around $94 million to $130 million in charges from its layoffs.
The company has been pouring money left and right into the Specs sub-division, instead of Snapchat, as that is more likely to drive more revenue. Though Meta does lead the market right now in that area, and that likely isn’t going to change anytime soon. Especially after extending its exclusive deal with the Ray-Ban and Oakley parent company, EssilorLuxottica.
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