Snap Inc., the parent company of Snapchat, is reportedly preparing for a significant restructuring that could see 15-20% of its workforce laid off, according to a report by Alex Heath. This move comes as the company's augmented reality (AR) glasses unit, Specs Inc., is actively recruiting for an "imminent launch" of its consumer-focused AR glasses, designed to compete in a market influenced by Apple's Vision Pro. Simultaneously, a previously discussed $400 million deal with AI firm Perplexity has been called off.
The impending job cuts follow a series of workforce reductions at Snap, including a 10% global staff cut in February 2024, impacting approximately 500 employees. The Economic Times, referencing Heath's report, indicated that the current round of layoffs could affect a substantial portion of Snap's more than 5,000 employees, with some teams potentially being halved. These measures are often implemented by tech companies to streamline operations and enhance financial performance.
In a contrasting strategic move, Snap's Specs subsidiary, which was spun off as an independent entity in January 2026, is expanding its team. This unit is focused on developing lightweight, immersive AR smart glasses, with a consumer launch anticipated in 2026. CEO Evan Spiegel has stated that the new "Specs" will be priced lower than Apple's $3,499 Vision Pro, aiming for a more accessible entry into the burgeoning spatial computing market. Snap has invested over $3 billion in its AR vision, positioning Specs as a key future product.
Adding to the corporate shifts, a $400 million integration deal between Snap and Perplexity AI has reportedly been terminated. This agreement would have embedded Perplexity's AI answer engine within Snapchat, with Perplexity providing cash and equity. The Economic Times reported that the deal's cancellation stemmed from disagreements over terms, marking a notable change in Snap's AI partnership strategy.
"Snap set to announce big layoffs tomorrow. Some teams halved or more," Alex Heath stated in the tweet, further noting, "The $400m deal with Perplexity is not happening."
The company's focus on its Specs AR glasses, despite broader layoffs and the failed AI partnership, underscores its long-term commitment to augmented reality as a core growth area. Specs are expected to feature an "Intelligence System" for AI assistance, running on Snap OS, and are being developed to understand and interact with the user's environment, offering experiences from gaming to navigation.
