-- Snap (SNAP) plans to lay off about 1,000 employees, or roughly 16% of its full-time workforce, as part of Chief Executive Evan Spiegel's efforts to reduce costs.
The job cuts are aimed to reallocate resources to high-priority initiatives, the social media company said in a Wednesday regulatory filing. In addition, the group is closing more than 300 open roles.
Snap expects to reduce its annualized cost base by more than $500 million by the second half, "helping to establish a clearer path to net-income profitability," Spiegel said in a note to staff.
"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," Spiegel said.
The company estimates pretax charges of $95 million to $130 million from the workforce reductions, majority of which are expected to be incurred during the second quarter, the company said in the filing.
Snap's shares rallied 6.3% in Wednesday trade. The stock has lost 26% so far this year.
In 2024, the company disclosed plans to reduce its global headcount by about 10%, less than two years after it said it will lay off 20% of its workforce and discontinue certain projects.
As a result of the latest job cuts, Snap expects adjusted operating expenses of roughly $2.75 billion for 2026, down from its previous guidance of about $3 billion, according to an investor presentation. The company reiterated its infrastructure cost outlook of $1.6 billion to $1.65 billion.
For the first quarter, the Snapchat parent projects revenue of about $1.53 billion, representing annual growth of 12%, at the high end of its previously issued guidance range. The current consensus on FactSet is for sales of $1.52 billion.
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