Meta is undergoing a significant reorganization, leading to layoffs of hundreds of employees across major sectors, including Facebook and Reality Labs, as the company prepares for the rise of artificial intelligence.
The cuts come as Meta shifts away from its costly Metaverse initiatives, having invested billions in virtual reality with limited results.
Resources are now being redirected toward artificial intelligence and wearable technology, which the company believes will offer better returns as interest in VR devices declines and investor confidence begins to wane.
According to a spokesperson, “Teams across Meta regularly undergo restructuring or changes to ensure we are best positioned to achieve our goals.” Reports of the layoffs came first from Information.
“Where possible, we’re exploring alternative roles for affected employees,” they added.
This round of layoffs will affect a small fraction of Meta’s global workforce of approximately 78,000.
Zuckerberg mentioned that AI is crucial for streamlining operations and boosting productivity.
While some employees have been offered new roles within the company, it appears that certain positions might require relocation or reassignment, according to a source.
This latest round of cuts follows earlier job eliminations, including about 1,500 roles in the Reality Labs division in January.
Last year, Meta reduced approximately 5% of its least effective employees in an ongoing effort to improve efficiency.
There were rumors that Meta could downsize its workforce by as much as 20% this year, but the company labeled these reports as merely “speculation.”
Amid these changes, Meta is significantly increasing its investment in artificial intelligence, with projected capital spending between $115 billion and $135 billion this year—a rise of around 75% compared to last year.
Much of this budget will be allocated to data centers, servers, and other essential infrastructure for developing advanced AI systems.
The company also anticipates a nearly 40% increase in operating expenses due to higher compensation costs associated with recruiting technical talent.
Since the beginning of the year, Meta’s stock price has declined by almost 10%, hovering around $598.24 per share by midday on Wednesday.
