Meta Plans to Cut 8,000 Jobs Amid Rising AI Costs

On 30 April, Meta CEO Mark Zuckerberg said the company’s next round of layoffs on 20 May is down to increased spending on AI, while declining to rule out further job cuts during a company meeting.

“We basically have two major cost centers in the company: compute infrastructure and people-oriented things,” Mark said to Meta employees.

“If we’re investing more in one area to serve our community, then that means we have less capital to allocate to the other. So that means we do need to take down the size of the company somewhat.”

Mark added that the workforce cuts are unrelated to Meta’s reorganisation of teams around its planned “AI-native” structure and the company’s plans to develop autonomous AI agents.

Company restructuring plans

The company’s silence on the layoffs amid announcements of the company’s restructure, in addition to its plans to use AI to monitor employee progress, has been met with criticism across the tech industry.

According to a BBC report on 21 April, several unnamed Meta employees voiced their concerns over the threat of layoffs and AI, with one describing the changes as “dystopian” and that Meta has become “obsessed with AI”.

Other critics include venture capitalist Marc Andreesen, who on an episode of the 20VC podcast, said: “Essentially, every large company is overstaffed.

“I think most large companies are overstaffed by 50%. I think a lot of them are overstaffed by 75%. Now they all have the silver bullet excuse: Ah, it's AI.”

Mark discussed the uncertainty around AI and job cuts, saying: “Getting everyone internally to use AI tools and getting to do the work more efficiently is not the thing that’s driving layoffs.”

He added that the company, for now, will observe the coming changes and that the company would “be able to share more soon”.

Job cuts to offset AI infrastructure cost

The internal meeting on 30 April marks the first time the Meta CEO has addressed employees directly about company layoffs since Reuters first reported the plan in March.

Meta has announced it will lay off around 10% (8,000 workers) of its workforce on 20 May, with plans for additional cuts for the second half of the year.

Other tech companies like Oracle laid off approximately 10,000 employees in April and Snap previously announced plans to lay off 16% of its workforce, with CEO Evan Spiegel citing “rapid advancements in artificial intelligence” as the reason behind them in a company statement.

In recent months, the tech industry has seen massive employee layoffs attributed to AI, with outlets like Nikkei Asia reporting that almost half of layoffs in the sector have been connected to the technology.

Meta claimed in late April that these mass lay-offs will help offset rising costs brought on by the demand for AI infrastructure, but is yet to announce any other new developments.
 
During the meeting, Mark said: “I wish that I can tell you that I have a crystal ball plan for the next, like, three years of how all this stuff is going to play out. I don't. I don't think anyone does.”