Job cuts in USA: Snapchat owner said on Wednesday that 16 per cent of its global workforce, or about 1,000 jobs will be culled in the company’s latest round of layoffs. Snap Inc. said in a regulatory filing that the job cuts will cost about $95 million to $130 million in severance payments and related costs. The move, which also includes the closure of more than 300 open roles, comes weeks after Irenic Capital Management pushed the Snapchat parent to optimize its portfolio and improve performance. The activist investor has an economic interest of about 2.5 per cent in the company.
SNAP Job Cuts
Snap said advances in artificial intelligence are helping it streamline operations and operate with smaller teams, with AI generating more than 65 per cent of new code as it assigns critical work to focused teams and AI agents. The company had about 5,261 full-time employees as of December.
Snap expects to cut more than $500 million in annualized expenses by the second half of the year through the layoffs, CEO Evan Spiegel said, as part of a broader plan to reduce operating costs and stock-based compensation. He also asked North America employees to work from home on Wednesday.
AI Layoffs
Artificial intelligence is reshaping the workforce by automating routine tasks, with more than 80 tech companies cutting about 71,440 jobs so far this year, according to data aggregator Layoffs.fyi.
The start of the year has seen massive layoffs across U.S. companies as they streamline operations amid rising adoption of artificial intelligence tools. Investors’ and economists’ concerns that artificial intelligence will upend established industries are deepening, with job losses already emerging in sectors most exposed to automation.
Goldman Sachs economists said in February that AI was responsible for 5,000 to 10,000 monthly net job losses last year in the most exposed U.S. industries. A survey by global outplacement firm Challenger, Gray & Christmas linked AI to 7 per cent of total U.S. planned layoffs announced in January.
Meta plans to cut around 10 per cent of the employees in its Reality Labs division who work on products including the metaverse, according to a New York Times report
Nike is laying off 775 employees, primarily impacting distribution center roles in Tennessee and Mississippi, a source familiar with the matter told Reuters
Citigroup will cut about 1,000 jobs as part of a plan announced two years ago to reduce the workforce by 20,000, a source familiar with the matter told Reuters
Morgan Stanley has cut about 3 per cent of its workforce, or roughly 2,500 employees, across all divisions, a person familiar with the matter told Reuters.