Laying off staff to cut costs while heavily investing in a vision that hasn’t yielded returns in a decade.Author: June
Source: Shenchao TechFlow
On June 16, Snap CEO Evan Spiegel officially launched AR glasses called Specs at the Augmented Reality World Expo, priced at $2,195.
On the day of the message, SNAP's stock price plunged nearly 10%, closing at $5.16.
Soon, a popular post appeared on Reddit’s well-known retail investor community r/wallstreetbets:
The poster called the CEO a "brain-dead idiot," compared the company to a "capital furnace," and even begged others to post images of massive losses so he could sleep peacefully.
He voiced the most direct question on behalf of the entire market: How can a company that has been losing money year after year bet its revival on a pair of glasses that young people simply can’t afford?
A product you may not have used, but have certainly seen.
When it comes to Snapchat, friends in China may not be very familiar with it, but you’ve probably seen this once-popular "dog filter":
The virtual puppy with its tongue sticking out and ears that move with its head was the most popular filter from Snapchat’s Lenses (AR filters) launched in 2015.
The real-time facial tracking technology behind it comes from Looksery, a Ukrainian startup that Snap acquired for approximately $1.5 billion. This remains the largest acquisition in Ukrainian tech history, and it was Snapchat that truly turned this technology into a global phenomenon, inspiring both celebrities and everyday users to emulate it.
A pioneer repeatedly copied
To some extent, looking back at Snapchat’s history, it resembles a “history of being copied.”
The pioneering timed stories were nearly copied by Instagram and are now standard across nearly every social app; the camera-first interface and swipe-based navigation have been adopted industry-wide for nearly a decade; even its early bet on AR glasses was preempted by Meta’s Ray-Ban smart glasses, which turned into a hit.
Snapchat has repeatedly stood at the forefront of technology but has never managed to turn its first-mover advantage into commercial success.
This is also evident from its stock price.
Since its all-time high of $83.34 in September 2021, SNAP has plunged 94% over the past five years, starkly contrasting with the U.S. stock market’s continued record highs during the same period.
2021 marked the peak of the pandemic-driven boom—but also the turning point. That same year, Apple tightened iOS privacy tracking permissions, severely undermining Snap’s core advertising targeting capabilities. In the years that followed, TikTok and Instagram surged ahead, while Snap, due to its persistently weak profitability, never regained its former stock price levels.
Return to the popular post mentioned at the beginning.
Why did Snap's stock price drop immediately after launching its new product, and why are these AR glasses being ridiculed across nearly the entire internet on X and Reddit?
First, we must consider its core users: Snapchat’s primary audience is Gen Z aged 18 to 24. Selling a pair of glasses priced at $2,195 to a group of young people who generally cannot afford it is clearly unrealistic.
Placing this dilemma within the context of industry peers makes it clearer.
Similarly engaged in content socializing, Meta generated $56.3 billion in quarterly revenue and nearly $27 billion in net profit; ByteDance and Xiaohongshu have also achieved profitability.
Snapchat is the only platform with growing users and rising revenue, yet it still posted a net loss of $89 million in the first quarter of 2026. Since its IPO in 2017, it has recorded an annual net loss every year. The reason is that younger users are not the most attractive demographic for advertisers; brands prefer to allocate their budgets toward consumers aged 25 to 45, who are the primary spending group.
Being young became a burden for Snap’s monetization.
A decade-long AR gamble
Under these circumstances, Spiegel still chose to double down.
He called 2026 the company’s “crucible moment.” In April of this year, Snap laid off approximately 1,000 employees, or 16% of its workforce, citing that AI can now handle a large volume of repetitive tasks.
At the same time, the company has invested over $3.5 billion cumulatively in the Specs AR glasses production line. Since the first-generation Spectacles in early 2016, this high-stakes venture has lasted nearly a decade.
To see how far we've come over the past decade, we must return to the first-generation glasses.
Image: The original glasses from 2016
It was released in September and launched in November of that year—a pair of iconic bright yellow glasses sold through street vending machines, with a camera embedded in the frame. Technically, it wasn’t quite AR; wearing it allowed you to record and share circular, hands-free short videos on Snapchat. In essence, it was more like a fun wearable gadget.
Figure: Specs to be launched in 2026
Ten years from now, Specs will overlay digital information onto real-world scenes, run AI functions, recognize gestures, and operate independently without a phone. This is a decade-long leap from “glasses that record video” to “a spatial computer worn on the face”—the very future Spiegel truly wanted to bet on.
Throughout the entire incident, what sparked the biggest outcry from investors was the widely considered outrageous pricing.
The question is, what did the extra money buy?
Compared to the Ray-Ban Display, which only has a small HUD tucked into the corner of its lenses for $799, Specs are true AR—they overlay digital content onto the real world, recognize gestures, and operate independently of a smartphone, offering a significantly more advanced feature set.
But it weighs about 132 grams—nearly twice as much as the former—and offers only around four hours of battery life, while its flagship features—navigation, measurement, and AI queries—are already functions smartphones can perform. Paying $2,195 buys you a leap into a new product category, but not necessarily a mature product suited for everyday use. This may be precisely what investors find truly unsettling.
When activist investor Irenic Capital publicly pressured the company to shut down or spin off the Specs division to preserve cash flow, Spiegel publicly rejected the proposal, insisting on keeping it as part of the company’s long-term model.
Laying off staff to cut costs while heavily investing in a vision that hasn’t yielded returns in a decade.
This is the most authentic portrayal of Snapchat right now.
End
In 2015, Snapchat went viral worldwide with an AR effect resembling a virtual puppy; today, eleven years later, its heavy investment in AR glasses is met with little confidence.
However, not everyone treats it as a farce.
Some view it as part of the evolution of mobile phones. From bulky, brick-like early cell phones to today’s smartphones, this journey has taken over thirty years. Currently expensive and heavy AR glasses may simply be an awkward but necessary step on the path to maturity.
But in an era where short-term gains and herd mentality dominate, is a founder like Spiegel, who steadfastly sticks to his convictions, a rare outlier in the industry—or a gambler destined to be eliminated by the market?
This question may be worth answering for each observer themselves.