Snap reportedly set for major layoffs as Perplexity deal falls apart

Snap is set to announce major layoffs as soon as tomorrow, according to Alex Heath at Sources, with some teams expected to be cut by half or more.

The total cuts could reach 15 to 20 percent of Snap’s workforce, which is over 5,000 people. If you’re having a déjà vu moment, it’s because the company had cut around 10% of staff in early 2024 and slashed 20% back in 2022.

The restructuring is meant to separate the core Snapchat business from Specs, CEO Evan Spiegel’s AR glasses unit. The Snapchat side takes the cuts while the Specs org adds headcount, including the team behind Lens Studio, the platform developers use to build AR software for both products.

Snap spun off Specs as a standalone subsidiary in January, to eventually spin it off entirely or raise outside capital. According to Heath, the company had been in talks to raise at least $1 billion for Specs, but those talks went nowhere. Snap is now banking on a consumer product launch this fall to bring in investors instead.

A preview of the new Specs glasses is expected within the next couple of months, loosely following how Apple rolled out the Vision Pro. Snap first showed off the new Specs at AWE 2025 and has been building toward this launch ever since.

Separately, the $400 million deal Snap struck with Perplexity is reportedly dead. Under that agreement, announced in November 2025, Perplexity was supposed to pay Snap $400 million in cash and equity to embed its AI search engine inside Snapchat, a sum worth roughly 7% of Snap’s 2025 revenue. The deal never rolled out. Snap’s last earnings call acknowledged delays over disagreements on terms, but the deal now appears fully off.

Heath notes that Perplexity CEO Aravind Srinivas recently unfollowed Spiegel on X. So you can put two and two together.

Spokespeople for both companies declined to comment.

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