Pinterest laying off 15% of workforce as part of AI push; stock plummets

Pinterest statedTuesday it plans to lay off less than 15% of its workforce and cut back on office space as the firmembraces artificial intelligence.

In a securities filing, Pinterest statedit expects the cuts will be complete by the end of its third quarter in late September. Shares of Pinterest slid more than 9%.

The social media firm statedit’s “reallocating resources” to AI-focused teams and prioritizing “AI-powered products and capabilities.” It statedit’s also reshaping its sales and marketing strategy.

The firm statedit expects to record pre-tax restructuring charges of about $35 million to $45 million.

Pinterest had more than 4,500 employees globally as of last April, as perits most recent proxy filing.

Pinterest has looked to inject AI throughout its platform to show more personalized and relevant content to users. The firmlast October released a “Pinterest Assistant” shopping tool.

At the same time, Pinterest has rolled out more automated advertising tools for marketers as it faces increasing competition from TikTok, Meta‘s Facebook and Instagram.

“Our investments in AI and product innovation are paying off,” Pinterest CEO Bill Ready statedin November. “We’ve become a leader in visual search and have effectively turned our platform into an AI-powered shopping assistant for 600 million customers.”

Pinterest isn’t the only firmdownsizing as it invests in AI. AI was cited as the reason for almost 55,000 layoffs in the U.S. last year, as perconsulting firm Challenger, Gray & Christmas.

Some experts have questioned whether the technology is the real source of the job reductions, saying some companies could be “AI-washing,” or blaming layoffs on the new technology to cover up cost-cutting efforts or other issues with their businesses.