Meta May Cut Up to 20% of Staff as AI Investments Accelerate

Meta Platforms may be preparing another major round of layoffs as it pours billions into artificial intelligence.

Reports from Reuters and CNBC say the company is considering workforce cuts that could affect 20% or more of employees, though the plans have not been finalized, and Meta has not confirmed any layoffs.

The reported discussions highlight how companies in the tech sector are investing heavily in AI infrastructure while also exploring ways to run projects with smaller teams.

For Meta, the reported workforce planning comes as CEO Mark Zuckerberg pushes the company deeper into generative AI and restructures engineering groups to build and train more advanced models.

Meta executives reportedly discuss potential cuts

Reuters said that Meta executives have signaled possible workforce reductions to senior leaders, asking them to consider plans for reducing headcount. Three people familiar with the discussions said layoffs could affect 20% or more of Meta’s workforce, though no timeline or final decision has been announced.

Meta spokesperson Andy Stone responded cautiously when asked about the report. “This is speculative reporting about theoretical approaches,” Stone told Reuters. 

According to CNBC, Meta employed nearly 79,000 workers as of Dec. 31, according to its latest regulatory filing. If the company were to proceed with layoffs at the scale discussed, the cuts would be larger than the workforce reductions Meta made during its restructuring period in 2022 and 2023. 

AI investments driving internal restructuring

The reported workforce discussions come as Meta significantly expands its investments in generative AI. 

Reuters reported that the company has said it plans to spend $600 billion on building data centers by 2028 to support AI development. Meta has also been aggressively recruiting AI researchers and building new engineering organizations focused on improving model training. 

Earlier this month, Meta created new applied AI engineering teams focused on improving how models learn from real-world data and feedback. The Wall Street Journal reported that an internal memo noted that the organization will focus on building the systems and pipelines needed to continuously improve AI models. 

“Building great models isn’t just about researchers and compute; it requires real-world data, feedback, and evals,” wrote Meta vice president Maher Saba.

The new organization may also adopt flatter team structures. Some engineering groups could have manager-to-engineer ratios of up to 50 individual contributors per manager, according to employees familiar with the plan. 

AI investments reshape tech hiring strategies

Executives across the tech sector have pointed out improvements in AI tools as one reason companies may be able to operate with smaller teams, Reuters emphasized. 

In January, Amazon confirmed it would cut some 16,000 jobs, roughly 10% of its workforce.

“Last month, the 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 do more with smaller teams,” Reuters noted.

For more on Meta’s AI development strategy, see our coverage of the company’s new data engine teams built to train smarter models.

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