Meta prepping biggest layoffs in years as AI spending surges
What's the story
Meta, the tech giant led by Mark Zuckerberg, is said to be planning massive layoffs. The move could affect 20% or more of its workforce, accrding to Reuters. The decision comes as part of a strategy to offset the high costs of artificial intelligence (AI) infrastructure investments and prepare for greater efficiency with AI-assisted workers.
Uncertainty
No official timeline or scale for job cuts confirmed
Despite the reports, no official timeline or scale for these job cuts has been confirmed. Senior executives at Meta have reportedly hinted at the plans to other top leaders in the company, asking them to start strategizing on how to reduce their teams. However, a Meta spokesperson Andy Stone dismissed such speculation as "theoretical approaches."
Workforce reduction
Layoffs could affect nearly 16,000 employees
If the company goes ahead with the proposed 20% cuts, it could mean laying off nearly 16,000 employees. This would be Meta's biggest job cut since its "year of efficiency" restructuring in late 2022 and early 2023. The company had previously laid off some 11,000 employees in November 2022 and another round of cuts came four months later when it announced plans to cut another 10,000 jobs.
Strategic moves
Meta's push into generative AI and recent acquisitions
Over the past year, Zuckerberg has been pushing Meta to aggressively compete in generative AI. The company has offered lucrative pay packages to attract top AI researchers for its new superintelligence team. It plans to invest $600 billion on data centers by 2028 and recently acquired Moltbook, a social networking platform for AI agents. Meta is also spending at least $2 billion to buy Chinese AI start-up Manus.
Challenges ahead
Setbacks with Llama models and broader tech layoff trends
Meta's planned AI investments come after a series of setbacks with its Llama 4 models last year. The company has also pushed back the release of its new model, Avocado, due to performance issues. Despite these challenges, Meta's layoff plans mirror a wider trend among major US companies in tech this year. Executives have cited recent improvements in AI systems as a reason for these changes.