Pinterest plans to lay off under 15% of its workforce as part of a broader restructuring to redirect resources toward artificial intelligence and AI-powered products, with the goal of completing the changes by late September.

The cuts affect roughly 700 employees out of 4,666 full-time staff reported at the end of 2024, and the company expects pretax charges between $35 million and $45 million.

CEO Bill Ready has framed the AI shift as a path to stronger personalization, shopping conversion, and longer-term revenue efficiency, including potential cost savings through open-source AI models.

Despite the promise of AI, concerns about AI-generated content quality—described as AI slop and spam—have drawn user backlash and contributed to a stock drop when earnings disappointed in November.

Markets reacted negatively to the strategy, with the stock declining as investors weighed the costs and uncertain short-term impact against AI-driven advantages.

Pinterest’s shares fell as much as about 10% in New York after the announcement, highlighting market sensitivity to AI-led restructurings.

The filing indicates Form 8-K reporting requirements are being observed, underscoring the regulatory framing of this impactful corporate event.

Analysts noted that heightened AI investment could pressure gross margins but might improve ad pricing power; competition and adoption risks for AI-enabled features were also highlighted.

The move sits within broader AI debates about employment impact, energy demand, and public perception of AI across sectors.

The AI-led restructuring aims to strengthen Pinterest’s position in digital advertising amid evolving competition, even as shares fell amid questions about cost savings and AI-driven revenue gains.

Investors overall responded with caution, reflecting a broader industry trend toward leaner, AI-focused workforces and moderate stock movements.

The announcement was disclosed in a regulatory filing, and Pinterest indicated it is seeking comment from investors and the public as part of the process.