Pinterest is cutting less than 15% of its workforce and reducing its office footprint as the company aggressively pivots to artificial intelligence. The social media platform announced its plans in a securities filing, stating that the workforce reductions are expected to be completed by the end of its third quarter in late September. Shares of Pinterest saw a decline of over 9% following the announcement.
The company is strategically reallocating resources to bolster its AI-focused teams, prioritizing the development of AI-powered products and capabilities. This strategic shift also involves a reshaping of its sales and marketing strategies. Pinterest anticipates recording pre-tax restructuring charges in the range of $35 million to $45 million. As of last April, Pinterest employed over 4,500 individuals globally, according to its most recent proxy filing.
Pinterest has been actively integrating AI across its platform to enhance user experience through more personalized and relevant content. Last October, the company launched its “Pinterest Assistant,” a shopping tool designed to streamline the online purchasing journey. Simultaneously, Pinterest has been rolling out more automated advertising solutions for marketers, a move that comes amidst increasing competition from rivals such as TikTok and Meta’s Facebook and Instagram.
“Our investments in AI and product innovation are paying off,” stated Bill Ready, CEO of Pinterest, in 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’s workforce adjustments reflect a broader trend within the tech industry. According to the consulting firm Challenger, Gray & Christmas, AI was cited as the reason for nearly 55,000 layoffs in the U.S. last year. However, some industry observers have raised questions about whether AI is the sole driver of these job reductions, suggesting that some companies might be engaging in “AI-washing” – using the new technology as a justification for cost-cutting measures or to mask other underlying business challenges.
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