Meta is betting the farm on AI, regardless of the mounting price tag. Now, the company is reportedly gearing up to slash one-fifth of its workforce through wide-reaching layoffs, according to an exclusively sourced Reuters report.
There’s no exact headcount or date set for when the cuts will occur, the three anonymous sources Reuters quoted said, but Meta’s top executives have reportedly asked their peers to begin planning for the layoffs.
A Meta representative did not immediately respond to a request for comment.
According to Reuters’ sources, Meta plans to operate with fewer workers now that AI agents assist them in their daily tasks. It’s also meant to cut costs associated with ramping up AI infrastructure.
Meta has been investing increasingly large sums to compete in the ever-evolving AI landscape, creating a “superintelligence team” that works toward achieving artificial general intelligence, or AGI.
Meta CEO Mark Zuckerberg has personally initiated a string of expensive hires and acquisitions during a tense AI talent war, poaching Scale AI’s co-founder in a $14.3 billion deal and offering $100 million signing bonuses to OpenAI engineers.
Few public wins so far
AI expert Katelyn Chedraoui notes that Meta’s biggest AI projects still haven’t come to fruition.
“Meta has been spending big to keep up with its AI ambitions, from hiring to data center construction,” Chedraoui said. “But all that cash hasn’t led to many public wins, with recent reports saying it will delay the release of its new foundational model, named Avocado. Rumors of cost-cutting measures like layoffs are another sign Meta is struggling.”
Meta’s struggles with Avocado aren’t an isolated problem for the company. Last year, Meta suffered a series of setbacks bringing its Llama 4 models to the public. More recently, Meta’s AI-powered smart glasses have been at the center of a class action lawsuit related to the capture of sensitive information — including nudity and otherwise private encounters. Meta’s rising costs are likely tied in part to these AI-generated frustrations.
The rumored layoffs wouldn’t be the first time that Meta executives have committed to carving away such a massive chunk of its workforce. Still, it would be the first time this has happened since the company pivoted hard toward developing its own AI models. Meta laid off 21,000 employees between 2022 and 2023.
If these layoffs come to pass, Meta would be far from the only Silicon Valley giant cutting costs by laying off workers in the age of AI. Over the past several months, major companies like Amazon, Block and Atlassian have announced layoffs affecting thousands of employees, citing increased reliance on AI tools as a motivating factor.
Earlier this year, Zuckerberg told investors he saw “projects that used to require big teams now be accomplished by a single very talented person.”
Meta continues to ramp up its spending on AI projects and platforms. The company recently purchased Moltbook, a social networking platform for AI, and is buying the Chinese startup Manus for $2 billion. Reuters reports that the company still plans to spend $600 billion on data centers by 2028.
