Snap on Wednesday announced its plan to terminate approximately 1,000 employees—roughly 16% of its full-time workforce—following pressure from activist investor Irenic Capital Management to streamline operations and boost performance.
The Snapchat parent company will also eliminate over 300 vacant positions, aiming to slash annualized expenses by more than $500 million by the latter half of this year. Following the news, Snap’s shares climbed over 5% in premarket trading, though the stock remains down nearly 31% for the year.
Smaller platforms like Snap and Pinterest are currently vulnerable as advertisers, facing geopolitical instability, prioritize the massive reach of giants like Meta and Alphabet. As of December 2025, Snap employed 5,261 people; it now expects to incur $95 million to $130 million in restructuring charges, primarily for severance, mostly during the second quarter.
A significant point of contention remains Snap’s “Specs” subsidiary, which focuses on AR smart glasses. Despite heavy investment and a planned consumer launch this year, Snap trails Meta in the market. Irenic Capital, holding a 2.5% stake, has urged the company to divest or shutter the unit, noting it has consumed $3.5 billion in capital and currently burns $500 million in cash annually.
CEO Evan Spiegel previously described the current era as a “crucible moment” for the firm. He remains focused on transforming direct revenue into a multi-billion-dollar growth engine to counter stagnating quarterly revenue.
“We bought Snap because we think the social network you built is an extraordinarily valuable asset – whose strategic value is only increasing,” Irenic had said recently in a statement.
Smart glasses biz Specs in trouble
Irenic recommends spinning off or shutting its smart glasses business Specs, which it argued, with $3.5 billion already sunk into it, should “be funded on its own” by now.
In January, Snap said that it would create a standalone subsidiary dedicated to Specs.
Michael Lynton, chairperson of Snap’s board, responded in a statement that “Snap welcomes input from all shareholders and regularly engages with investors on strategy, capital allocation, and governance.”
The board and management “are focused on building a more efficient, profitable business while investing with discipline in our long-term roadmap,” he added.
Lynton also said the company has “taken steps to improve performance, strengthen free cash flow, and offset dilution, and will continue to evaluate actions that drive long-term value for all stockholders.”
In November, Snap announced a stock buyback programme of up to $500 million of its Class A shares.
It also unveiled a $400 million partnership with Perplexity AI Inc. to incorporate its AI-powered search engine into Snapchat.
