Mark Zuckerberg’s tech firm Meta’s shares jump on report of plans to cut 20% or more of workforce
Meta Platforms shares rose nearly 3% on Monday after Reuters reported that the social media giant plans to lay off 20% or more of its workforce to offset heavy spending on artificial intelligence and betting on productivity gains from the technology.
If the Meta settles on the 20 percent figure, the cuts would be the largest since late 2022 and early 2023, a so-called “productivity year” restructuring that eliminates around 21,000 jobs.
Meta, which has been left behind in the artificial intelligence race, has spent heavily in recent years to catch up by building data centers and waging a war for talent. A capital expenditure of up to $135 billion is expected in 2026; That’s roughly double last year’s spending.
The spending is aimed at securing the cloud capacity needed to train and run AI models, and Meta will spend up to $27 billion on such services from Nebius under a deal announced Monday.
While the spend will power improvements to Meta’s advertising tools and boost sales, it has yet to launch an AI model that can challenge industry leaders OpenAI, Anthropic and Google.
Meta is working on a new model called Avocado, but the performance of this model fell short of expectations.
Rosenblatt Securities analyst Barton Crockett said a 20 percent staff cut could mean about $6 billion in cost savings or a 5 percent increase in adjusted core earnings.
“This doesn’t have to stop at 20%. If AI is really that effective on staff productivity, there could be more going forward.”
Meta, whose workforce reached 79,000 at the end of December, said “this is speculative reporting about theoretical approaches” in response to a Reuters request for comment on Friday.
The stock was trading at $629. It’s down 7% so far this year, after rising nearly 13% in 2025.
Artificial Intelligence Layoffs Increase
AI-related layoffs are increasing worldwide. Companies have announced more than 61,000 AI-related layoffs since November, including Amazon and Australia’s Wisetech.
The debate over AI replacing human workers intensified after Block CEO Jack Dorsey last month announced plans to lay off nearly half of the company’s staff, saying the technology was changing “what it means to start and run a company.”
Some analysts pointed out that the layoffs also followed a period of over-hiring at companies. OpenAI CEO Sam Altman said last month that some companies are blaming AI for layoffs they would have made anyway.
“Is AI a convenient scapegoat for disruptions that might already be happening? Maybe. But we believe the market will quickly catch on to companies using AI as camouflage,” Bernstein analyst Mark Shmulik wrote in a note. he said.
He pointed to the success of its post-pandemic restructuring, adding that Meta was “probably the best-positioned incumbent to transition to an AI-powered organization.”
