Meta plans to cut a tenth of its workforce, looking for productivity gains from its remaining workers as it invests heavily in artificial intelligence.
Meta will lay off about 8,000 employees and leave thousands of other positions unfilled next month, a source told AFP.
The move comes as co-founder and chief executive Mark Zuckerberg makes a priority of delivering “superintelligence” in a costly AI race against rivals including Amazon, Google, Microsoft, and OpenAI.
Reports on Thursday also indicated that Microsoft is looking to trim its ranks with voluntary buyouts of some US employees in an unprecedented move by the tech stalwart founded in 1975.
About seven per cent of US employees at Microsoft were reported to be eligible for an offer aimed at workers who are senior director level or lower, whose years of employment and age add up to 70 or more, according to a CNBC report.
Microsoft, which has also been pouring billions of dollars into AI, declined to comment.
Meta and Microsoft are both set to report quarterly earnings next week.
Meta in January reported quarterly earnings that topped market expectations, as revenue grew along with investments in AI.
Meanwhile, costs tallied $35.15 billion, an increase of 40 per cent from the same period a year earlier, the earnings report noted.
Capital expenses, including infrastructure such as data centres to power AI, were $22.14 billion in the quarter, according to the company.
Meta anticipated capital expenditures in the $115 billion to $135 billion range this fiscal year, driven by increased investment in Meta Superintelligence Labs and its core business.
“I’m looking forward to advancing personal superintelligence for people around the world in 2026,” Zuckerberg said on an earnings call.
Meta is locked in a bitter rivalry with other tech behemoths racing to invest heavily in AI, aiming to ensure the technology generates profits in the not-so-distant future.
Most analysts believe Meta will make the investment pay off by improving advertising efficiency and creating new opportunities, such as with its smart glasses through a partnership with Ray-Ban maker EssilorLuxottica.
Meta is ramping up spending to record highs, announcing an array of multi-billion-dollar deals with AI partners and incentivising employees to be more productive by using AI agents for coding and other tasks, according to Wedbush analyst Dan Ives.
Ives reasoned that more layoffs could be in store at Meta this year as part of a strategy to use AI to gain efficiencies.
“We believe that this is part of Meta’s strategy to increase leverage of AI tools to automate tasks that once required large teams, allowing the company to streamline operations and reduce costs,” Ives said in a note to investors.
“We are encouraged by management’s cost-cutting efforts thus far.”
AFP
