Meta Reportedly Plans Sweeping Layoffs as AI Costs Increase
Meta is planning sweeping layoffs that could impact 20% or more of the company, according to three anonymous sources familiar with the matter who spoke to Reuters. The potential cuts are part of Meta's strategy to offset expensive artificial intelligence infrastructure investments and prepare for greater efficiency driven by AI-assisted workers.
Details of the Planned Layoffs
No specific date has been set for the layoffs, and the exact magnitude has not been finalized, the sources indicated. Top executives have recently signaled these plans to other senior leaders at Meta, instructing them to begin planning how to pare back operations. The sources requested anonymity because they were not authorized to disclose the cuts publicly.
If Meta proceeds with the 20% figure, these layoffs would represent the company's most significant workforce reduction since a restructuring in late 2022 and early 2023, which Meta dubbed the year of efficiency. As of December 31, Meta employed nearly 79,000 people, according to its latest filing.
Historical Context and AI Investments
In November 2022, Meta laid off 11,000 staffers, approximately 13% of its workforce at the time. Around four months later, it announced an additional 10,000 job cuts. Over the past year, Chief Executive Mark Zuckerberg has aggressively pushed Meta to compete in generative AI, offering huge pay packages—some worth hundreds of millions of dollars over four years—to court top AI researchers for a new superintelligence team.
The company has stated plans to invest $600 billion to build data centers by 2028. Earlier this week, Meta acquired Moltbook, a social networking platform built for AI agents, and is spending at least $2 billion to buy Chinese AI startup Manus, as previously reported by Reuters.
Efficiency Gains and Broader Industry Trends
Zuckerberg has alluded to efficiency gains from these investments, noting in January that he is starting to see projects that used to require big teams now be accomplished by a single very talented person. Meta's plans reflect a broader pattern among major U.S. companies, particularly in the tech sector, this year. Executives have cited recent improvements in AI systems as a key reason for such changes.
For instance, in January, Amazon confirmed it would cut about 16,000 jobs, nearly 10% of its workforce. Last month, fintech company Block chopped nearly half of its staff, with CEO Jack Dorsey explicitly pointing to AI tools and their growing capability to help companies achieve more with smaller teams.
Challenges with AI Models
Meta's planned AI investments follow a series of setbacks with its Llama 4 models last year, including criticism that they provided misleading results on benchmarks used for early versions. The company abandoned the release of the largest version, called Behemoth, which was due out in the summer.
The superintelligence team has been working to reassert Meta's standing this year by building a new model called Avocado, but its performance has also lagged expectations. Meta did not immediately comment on the layoff reports.
