Snap Inc Layoffs: 20% Job Cuts as CEO Evan Spiegel Bets on Specs AR Glasses After Perplexity AI Deal Collapses

Social media platform Snapchat’s parent company, Snap Inc, is set to lay off around 15-20% of its workforce on Thursday, according to Alex Heath in his Substack newsletter Sources.

In a blog post titled Snap’s Crucible Moment, Heath reported that sources described the layoffs as “sweeping cuts that will more distinctly separate the legacy Snapchat business from Specs,” referring to CEO Evan Spiegel’s major bet on augmented reality (AR) glasses.

The report also noted uncertainty over how strongly Spiegel will frame these cuts as being driven by artificial intelligence.

At the same time, the Specs organisation, which was recently spun off as a separate subsidiary, is reportedly hiring employees. This includes teams working on the Lens Studio platform, which developers use to build AR experiences for both Snapchat and Specs.

What is Specs Organisation?

In January 2026, Snap said that its unit focused on developing AR glasses will now be housed under a wholly owned subsidiary called Specs Inc. The company said this move would provide “greater operational focus and alignment” as it prepares to launch Specs AR glasses later this year.

The subsidiary is also expected to help Snap attract new partners and provide “capital flexibility,” including the potential for minority investment. While Snap did not disclose the number of employees in the unit, it said Specs is currently hiring for nearly 100 roles. The company had earlier indicated to analysts in November that it planned to create such a structure.

Snap had previously announced plans to release the sixth generation of its AR glasses in 2026, though it has not yet confirmed pricing or an exact launch date. The upcoming devices are expected to be smaller, lighter and designed for consumers.

The move comes as competitors such as Meta and Alphabet continue investing heavily in AI-powered smart glasses.

Perplexity Integration Aborted

Separately, a much-publicised integration deal between Snap and Perplexity AI has fallen through, according to the newsletter. The agreement would have seen Perplexity pay $400 million in cash and equity to embed its AI answer engine within Snapchat.

Snap had hoped the partnership would become a model for future AI integrations. However, the rollout was delayed due to disagreements over terms, the company said in its most recent earnings call. The proposed payment would have accounted for roughly 7% of Snap’s projected 2025 revenue.