Snap jumps after revealing plans to lay off ~16% of its workforce, new guidance sees Q1 revenue up ~12% year on year
Snap jumped as much as 10% in premarket trading on Wednesday after the social media company announced that it may cut about 1,000 roles, or roughly 16% of its full-time employees, in an attempt to improve profitability.
In an SEC filling that followed its Investor Update presentation on Wednesday, Snap also added that it will be closing more than 300 open roles. As a result of the job cuts and other measures, the company expects to save roughly $500 million in annualized expenses by the second half of 2026.
Through the latest moves, Snap is “pivoting towards profitable growth,” per CEO Evan Spiegel, doubling down on its more than 60% gross margin target for 2026. It also joins a growing list of tech companies cutting jobs citing AI, with Spiegel adding that “rapid advancements in artificial intelligence [will] enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers.”
In the same investor update event, Snap also updated parts of its Q1 financial outlook, including reduced guidance on its stock compensation and adjusted operating expenses. The company now expects revenue of approximately $1.529 billion, up 12% year over year and just above analyst expectations of $1.524 billion, as compiled by Bloomberg. Snap expects adjusted EBITDA to come in at $233 million, again ahead of Wall Street’s current forecasts ($184 million).
