Snap announced Wednesday it will eliminate about 1,000 jobs, representing 16 percent of its full-time workforce, as the social media company accelerates its shift toward artificial intelligence. CEO Evan Spiegel said in a memo that the cuts, along with the elimination of 300 planned roles, are designed to find a path to profitability. Investors cheered the news, sending Snap's stock up roughly 9 percent to above $6 a share in early trading.

The company is targeting over $500 million in cost reductions by the second half of this year, with AI now generating more than 65 percent of its code. The layoffs follow pressure from activist investor Irenic Capital Management, which owns about 2.5 percent of Snap's shares and criticized the company's $3.5 billion investment in AI-powered Spectacles glasses. Snap had already reduced staff by 10 percent in 2024 and 20 percent in 2022, employing 5,261 full-time workers as of December.

The cuts place Snap among nearly 90 tech companies that have eliminated at least 70,000 jobs this year, according to Layoffs.fyi. Snap expects to incur up to $130 million in layoff-related costs in its second quarter and projects revenue of $1.53 billion, a 12 percent year-over-year increase, when it reports earnings on May 6.