On Monday, shares of Meta increased by over 3% in early trading after reports surfaced about plans to reduce its workforce by more than 20% to focus on artificial intelligence investments.
According to sources, senior employees have been advised to start preparing for potential layoffs that could impact approximately 15,000 staff members. This would be Zuckerberg’s largest reduction since Meta eliminated over 20,000 positions from late 2022 to early 2023 as part of its “Year of Efficiency” initiative.
A spokesperson for Meta commented that the report is “speculative” and pertains to a theoretical strategy.
Meta, as reported, has yet to finalize when the layoffs will occur, and the total number could vary. The company had around 79,000 employees at the end of December, based on recent filings.
Zuckerberg, along with other leaders in Big Tech, is investing significant amounts in a competitive race to develop advanced AI technologies.
For 2026 alone, Meta anticipates spending $135 billion, which is double its budget from a year prior. There are concerns among investors that Zuckerberg’s spending on new technologies might be excessive.
Meta’s stock has plummeted nearly 20% over the past six months, dropping from roughly $764 in mid-September to about $613 in mid-March.
Last week, reports indicated that the introduction of Meta’s next AI model, named Avocado, was delayed due to performance challenges.
An analyst at Rosenblatt Securities, Barton Crockett, mentioned that these potential layoffs might just be the start of a wider transformation for the company, particularly if it starts using AI for tasks previously handled by human employees. He estimated that these cuts could save around $6 billion and potentially increase Meta’s adjusted core earnings by 5%.
“We don’t need to stop this at 20%,” Crockett remarked. “If AI significantly improves staff productivity, future reductions could be even more extensive.”
Wall Street is keeping a close eye on the situation, curious if layoffs related to AI will pick up in the upcoming months and years.
In January, Amazon laid off 16,000 workers, hinting that AI might take over the roles of those who lost their jobs.
Meanwhile, Jack Dorsey, a co-founder of Twitter, cut over 4,000 jobs at his fintech company, Block, last month, which amounted to around 40% of its staff. At that time, he warned that many companies might reach similar decisions in the near future.
Dorsey stated, “Within the next year, the vast majority of companies will come to the same conclusion and make similar structural changes. I would rather get there honestly and on our own terms than be passively forced.”
