Meta Plans Sweeping Layoffs to Fund Massive AI Spending Spree

Meta Considers Biggest Layoffs Since Twenty Twenty-Two

Meta Platforms is reportedly preparing sweeping workforce reductions that could affect up to twenty percent of its nearly seventy-nine thousand employees. The cuts, which could eliminate roughly sixteen thousand positions, would represent the company's most significant downsizing since the twenty twenty-two to twenty twenty-three period when twenty-one thousand jobs were axed during what CEO Mark Zuckerberg called the year of efficiency.

AI Spending Driving the Cuts

The proposed layoffs come as Meta doubles down on artificial intelligence investment at an unprecedented scale. The company has projected capital expenditure of between one hundred and fifteen billion and one hundred and thirty-five billion dollars for twenty twenty-six alone, roughly double what it spent the previous year. Looking further ahead, Meta plans to invest six hundred billion dollars in data centre buildouts by twenty twenty-eight.

To staff its AI ambitions, Meta has been offering pay packages worth hundreds of millions of dollars over four years to recruit top AI researchers for a new superintelligence team. The company has also pursued acquisitions including the AI agent platform Moltbook and a stake in the AI startup Manus.

Wall Street Responds Positively

Despite the human cost, investors reacted favourably to the news. Meta shares climbed three percent on Monday, signalling that Wall Street views aggressive cost management as an acceptable trade-off for massive AI investment. The message from traders was clear: heavy AI spending is encouraged as long as it is paired with efficiency elsewhere.

Broader Industry Pattern

Meta's plans mirror a wider trend across the technology sector. Amazon cut around sixteen thousand jobs earlier this year, Block reduced its workforce by nearly half, and Atlassian announced plans to cut roughly one thousand six hundred employees. Critics have labelled this trend AI-washing, suggesting companies are using artificial intelligence as a convenient justification for post-pandemic downsizing.

Internal AI Struggles Add Urgency

The urgency behind Meta's restructuring may also stem from setbacks in its own AI development. The company faced criticism over misleading benchmark results for early versions of its Llama four models and ultimately shelved the largest planned version. Its superintelligence team has been developing new models, but both have reportedly fallen short of internal expectations. Meta also cut equity-based compensation for most employees by about five percent this year, marking the second consecutive year of such reductions.