Snap Announces 1,000 Job Cuts Amid AI Adoption and Activist Pressure

Snap will lay off about 1,000 employees, representing 16% of its full-time staff, the company said. This move marks the latest instance of a technology firm shifting towards leaner teams as it increases artificial intelligence adoption to streamline operations. The reductions also include closing more than 300 open roles.

Credit: RICHARD DREW/AP

The company's decision follows weeks of pressure from Irenic Capital Management, which urged the Snapchat parent to optimise its portfolio and improve performance. The activist investor holds an economic interest of about 2.5% in Snap.

Advances in artificial intelligence are helping Snap streamline operations and operate with smaller teams. AI is generating more than 65% of new code, allowing the company to assign critical work to focused teams and AI agents. As of December, Snap had approximately 5,261 full-time employees.

Shares in the social media firm rose 5.8% after the announcement. The stock has fallen about 31% so far this year. Snap has invested heavily in its augmented reality glasses unit, Specs, and plans to launch the product this year.

However, Irenic Capital has called for Snap to spin off or shut down the cash-burning Specs business, citing more than USD 3.5 billion in investment. The firm has also advocated for broader cost cuts across the company.

"Cutting costs may appease an activist in the near term, and give long-suffering shareholders some relief, but whether it really leaves the company with a defensible business model and competitive position that it can defend, develop, and turn into profits and cash flow is still unclear," said Russ Mould, investment director at AJ Bell.

Snap expects to cut more than USD 500 million in annualised expenses by the second half of this year. Chief Executive Officer Evan Spiegel said these savings would be driven significantly by the recent layoffs, alongside broader efforts to reduce operating costs and stock-based compensation. Spiegel asked North America employees to work from home on Wednesday.

Artificial intelligence is reshaping the workforce by automating routine tasks, according to data aggregator Layoffs.fyi. Eighty technology companies have cut about 71,440 jobs so far this year due to this trend.

Snap anticipates first-quarter revenue to rise about 12% to roughly USD 1.53 billion, which is largely in line with Wall Street expectations, according to data compiled by LSEG. The company declined to comment on whether preliminary results include revenue from the USD 400 million Perplexity deal, announced last year.

Snap said in February that the companies "have yet to mutually agree on a path to a broader rollout" regarding the Perplexity deal. Despite its efforts, Snap has underperformed rivals in recent quarters, a trend advisory firm Madison and Wall does not expect to reverse.

The company forecast adjusted core profit of about USD 233 million for January-March, higher than Wall Street expectations of USD 186.8 million. It expects USD 95 million to USD 130 million in layoff-related charges, primarily in the second quarter, a regulatory filing showed.

Snap is scheduled to report its quarterly results on May 6.

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• Snap announced approximately 1,000 job cuts, affecting 16% of its full-time staff.

• The job reductions are driven by increased AI adoption for streamlining operations and pressure from activist investor Irenic Capital Management.

• Snap anticipates over USD 500 million in annualised expense cuts by the second half of the year.

Source: REUTERS

EU Commission Warns Meta WhatsApp AI Fee Breaches Antitrust Rules

The European Commission intends to order Meta Platforms to reinstate rival artificial intelligence assistants on its WhatsApp messaging service. This comes after the U.S. tech giant imposed an access fee for these assistants.

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The Commission notified Meta that its revised policy appears to breach EU competition rules. It believes the policy still excludes third-party AI assistants from WhatsApp.

Interim measures will remain in place until the investigation concludes. The Commission imposes these measures when it has concerns about damage to competition.

To prevent serious and irreparable harm to competition, the Commission plans to order Meta to reinstate access for third-party AI assistants. This access would be under the same conditions as before 15 October 2025.

Meta previously informed the Commission that it would allow rival AI assistants on WhatsApp for one year, contingent on a fee. This followed initial plans to ban third-party AI chatbots from WhatsApp Business entirely.

A Meta spokesperson stated that the European Commission is proposing to use its regulatory powers to enable some of the world's largest companies to use the paid WhatsApp Business product for free.

The spokesperson explained that a small bakery in France paying to use the service to take croissant orders would effectively be subsidising companies like OpenAI. Small European businesses, the spokesperson added, should not bear OpenAI's costs.

The Commission's investigation has also expanded to Italy. The Italian competition watchdog opened its own probe last year.

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• The European Commission plans to order Meta Platforms to allow rival AI assistants on WhatsApp without an access fee.

• The Commission believes Meta's current fee-based policy for third-party AI assistants breaches EU competition rules.

• Meta argues the fee is necessary, stating that waiving it would shift costs from large companies like OpenAI to small businesses.

Source: REUTERS

EU Age Verification App Available Amid Social Media Access Push

The European Union’s age verification application for online platforms is ready and will soon be available for use. European Commission President Ursula von der Leyen stated that the app will help address concerns about children’s access to social media. Member states are actively pursuing plans to limit minors’ social media engagement.

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A growing number of European nations are considering their own restrictions, following Australia’s social media ban for children. Concerns are mounting over social media’s impact on the health and safety of minors.

“We are moving ahead with full speed and determination on the enforcement of our European rules,” von der Leyen said at a press conference in Brussels. She added, “We are holding accountable those online platforms that do not protect our kids enough.”

The app will be compatible with both mobile devices and computers, von der Leyen explained. Users will upload their passport or ID card to confirm their age anonymously.

“This app gives parents, teachers, caretakers a powerful tool to protect children,” von der Leyen stated. She emphasised, “Because we will have zero tolerance for companies that do not respect our children’s rights.”

At least a dozen European countries, including Britain and Norway, have enacted or are considering legislation. These laws typically set minimum age limits, often between 13 and 16 years, for social media usage.

Speaking at the same press conference, the EU’s digital chief Henna Virkkunen outlined plans to establish a European coordination mechanism. This mechanism aims to ensure age verification is implemented consistently across various national schemes.

The Commission has been developing a harmonised digital verification system since last year. Governments face technical challenges in controlling children’s access to restricted online content.

For instance, Australia saw a significant increase in virtual private network (VPN) downloads after introducing its social media ban. Users employed VPNs to bypass the measure and access restricted platforms.

A senior Commission official acknowledged that the EU’s age verification system can be bypassed via a VPN. However, the official noted that the initiative is not aimed at policing people online.

“The app is the kind of barrier that avoids unintended exposure of kids,” the official said. While no EU-wide binding legislation has been adopted yet, the European Parliament approved a resolution report in November calling for a minimum age of 16 for social media access across all member states.

A final decision on potential EU legislation will be made once a special panel on child safety online files its recommendations this summer, a senior Commission official added.

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• The European Union’s age verification app for online platforms is ready and nearing release.

• European Commission President Ursula von der Leyen stated the app empowers parents and educators to protect children.

• The app allows anonymous age confirmation through passport or ID card uploads.

Source: REUTERS