Meta Reportedly Plans Job Cuts as AI Spending Surges
Meta bets the entire farm on AI, regardless of the increasing price. Now the company is reportedly preparing to cut a fifth of its workforce through massive layoffs, according to an exclusive Reuters report.
There is no specific headcount or set date for when the cuts will take place, the three anonymous sources cited by Reuters said, but Meta’s top executives have reportedly asked their peers to start planning the layoffs.
A representative for Meta did not immediately respond to a request for comment.
According to Reuters sources, Meta plans to operate with fewer workers now that AI agents assist them with their daily tasks. This also aims to reduce costs associated with scaling up AI infrastructure.
Meta has invested increasingly large sums to compete in the ever-changing AI landscape, creating a “superintelligence team“which aims to achieve general artificial intelligenceor AGI.
Meta CEO Mark Zuckerberg personally initiated a series of costly hires and acquisitions during a tense war for AI talent, poaching Scale AI’s co-founder in a $14.3 billion deal and offering $100 million signing bonuses to OpenAI engineers.
Few public victories so far
CNET AI expert Katelyn Chedraoui notes that Meta’s biggest AI projects still haven’t come to fruition.
“Meta has spent a lot of money to meet its AI ambitions, from hiring to building data centers,” Chedraoui said. “But all that money hasn’t led to many public victories, with recent reports claiming that it delay the release of its new founding modelnamed Lawyer. Rumors of cost-cutting measures, such as layoffs, are another sign that Meta is in trouble. »
Meta’s difficulties with Avocado are not an isolated problem for the company. Last year, Meta suffered a series of setbacks bringing its Llama 4 models to the public. More recently, Meta’s AI-powered smart glasses have been at the center of a class action lawsuit related to the capture of sensitive information, including nudity and private encounters. Meta’s rising costs are likely partly related to these frustrations with AI.
The layoff rumors would not be the first time that Meta’s leaders have committed to cutting such a large portion of its workforce. Still, this would be the first time this has happened since the company moved heavily toward developing its own AI models. Meta laid off 21,000 employees between 2022 and 2023.
If these layoffs come to fruition, Meta would be far from the only Silicon Valley giant cutting costs by laying off workers in the age of AI. In recent months, large companies like AmazonBlock and Atlassian announced layoffs affecting thousands of employees, citing increased reliance on AI tools as a motivating factor.
Earlier this year, Zuckerberg told investors that he was seeing “projects that previously required large teams were now being done by a single, very talented person.”
Meta continues to increase its spending on AI projects and platforms. The company recently purchased Shedding booka social networking platform for AI, and bought Chinese startup Manus for $2 billion. Reuters reports that the company still plans to spend $600 billion on data centers by 2028.
