Meta Plans Major Layoffs as AI Costs Surge

Meta is preparing for significant layoffs as it seeks to address rising costs associated with its artificial intelligence (AI) initiatives. According to a report from Reuters, the company may cut up to 20% of its workforce, potentially affecting around 16,000 employees. This move aims to offset the financial burden of its expanding AI infrastructure and increase operational efficiency.

While no specific timeline or scale for the layoffs has been publicly announced, the report indicates that Meta’s senior executives have already communicated the need for staff reductions to other leaders within the company. When approached for comment, Meta spokesperson Andy Stone described the report as “speculative reporting about theoretical approaches.”

This potential reduction in workforce follows a series of layoffs earlier this year, where Meta cut 1,500 jobs within its Reality Labs division. Additionally, the company has scaled back its metaverse initiatives for workplace applications. Should the anticipated 20% cut materialize, it would mark the most extensive layoff in Meta’s recent history, surpassing the 11,000 employees laid off in November 2022, which represented approximately 13% of its workforce at that time. Just a few months later, in March 2023, another 10,000 positions were eliminated.

Rising AI Expenses Drive Strategic Changes

The push towards generative AI has become a focal point for Mark Zuckerberg, CEO of Meta. The company has made substantial investments to attract top AI talent, offering competitive compensation packages to assemble a new superintelligence team. Last week, Meta expanded its portfolio by acquiring Moltbook, a social media platform designed specifically for AI agents.

In a notable move, Meta also acquired the AI firm Manus for approximately $2 billion, which has drawn scrutiny from Chinese regulators. The company is reportedly planning to invest $600 billion in building data centers by 2028 as part of its AI strategy.

During the Q4 2025 earnings call, Zuckerberg highlighted his expectations for the upcoming year, stating that “2026 is going to be the year that AI starts to dynamically change the way that we work.” He acknowledged that Meta has already begun to experience internal changes resulting from AI-driven efficiency improvements.

The potential layoffs signal a critical moment for Meta as it navigates the complexities of balancing workforce stability with the demands of an evolving technology landscape. The company’s ability to effectively manage these changes will be closely monitored by industry observers and stakeholders alike.