Snap Inc., the parent company of Snapchat, announced plans to lay off roughly 1,000 employees, about 16 percent of its workforce, as part of a major restructuring effort focused on artificial intelligence and operational efficiency.

Chief Executive Evan Spiegel described the move as a “crucible moment” for the company, framing the cuts as necessary to streamline operations and establish a clearer path to sustained profitability. The layoffs also include the elimination of more than 300 open roles.

The company expects the reductions to lower its annual cost base by more than $500 million by the end of 2026, though it anticipates incurring between $95 million and $130 million in one-time restructuring costs.

A central component of Snap’s strategy is the expanded use of artificial intelligence across its business. Company leadership said AI is already being used to accelerate product development, reduce repetitive work, and improve services for users and advertisers. Snap disclosed that approximately 65 percent of newly generated code is now produced with the assistance of AI tools.

The restructuring follows a broader internal review aimed at concentrating resources on key growth areas, including its subscription service, Snapchat+, and higher-margin advertising products. The company is also prioritizing markets where monetization has proven strongest.

For the first quarter, Snap projects revenue of approximately $1.53 billion and adjusted earnings before interest, taxes, depreciation, and amortization of $233 million.

The layoffs reflect a wider trend across the technology sector, where companies are restructuring workforces and investing heavily in AI capabilities amid increasing competition and pressure to improve margins.

Snap said affected U.S. employees will receive severance packages that include several months of pay, continued healthcare coverage, and career transition support, with comparable arrangements planned for international staff based on local regulations.