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When an activist investor with a 2.5% stake tells you to fire people, you listen. That’s the takeaway from Snap CEO Evan Spiegel’s announcement Wednesday that the company is cutting roughly 1,000 jobs — about 16% of its workforce — just weeks after Irenic Capital Management publicly called out the company for overhiring. Spiegel said the cuts would slash annualized costs by more than $500 million.
Irenic didn’t mince words in its March letter, pointing to Meta and Block as examples of companies that got leaner through layoffs. The investor argued Snap’s market cap should be closer to $35 billion instead of its current enterprise value of around $7.9 billion. Snap’s stock has tanked more than 30% this year.
This is the third time Snap has swung the ax since 2022. Still, the company projects first-quarter revenue climbed 12% to $1.53 billion, with adjusted EBITDA around $233 million. Turns out you can cut your way toward profitability after all.