Meta Plans Largest-Ever Layoffs as AI Costs Mount

Meta is reportedly planning its largest-ever layoffs, potentially cutting over 20% of its nearly 79,000-strong workforce — approximately 15,800 to 16,000 jobs — driven by mounting AI infrastructure costs and a push toward leaner, AI-assisted operations.

Meta Plans Major Workforce Reduction

Meta is reportedly preparing its largest-ever round of layoffs, with cuts that could affect more than 20% of its nearly 79,000 employees — approximately 15,800 to 16,000 jobs. The reported plan, which sources told Reuters could be implemented within a month, is driven by mounting AI infrastructure costs and a strategic shift toward leaner, AI-assisted operations.

AI Investment Reshapes Headcount Strategy

CEO Mark Zuckerberg has told investors that projects which once required large teams can now be handled by a single, highly talented individual. The company has been redirecting resources toward AI development, including producing training data for its models, while reducing management layers and emphasizing smaller, faster-moving teams.

Meta has confirmed a year-long restructuring effort known as Project OT, or Organization Transformation, which focused on cost cutting, redesigning team structures, and shifting staff into priority AI work. The company acknowledged that some scenario exercises examined reducing certain teams by as much as 60%, though it insisted it never intended to cut 60% of its entire workforce and that the exercise blended redeployments with layoffs.

Earlier Cuts and Internal Challenges

In May, Meta proceeded with a 10% workforce reduction — roughly 8,000 jobs — and scrapped plans to fill 6,000 open positions. A second wave of cuts planned for November was cancelled before leaders determined how many employees would be affected. The May layoffs disproportionately impacted managers and were intended to simplify reporting structures.

The restructuring has faced internal friction. Employee sentiment, as measured by Meta's half-year Pulse survey, fell from 74% favourable to 55%. More than 1,000 employees signed a petition against tracking software that captured keystrokes and mouse clicks on US laptops to train AI agents. In July, 26 Meta employees sued the company, alleging it used internal AI systems and activity-monitoring data to disproportionately target workers on medical, parental, or family leave during the May cuts.

Technical challenges have also emerged. Code changes to internal systems jumped 220% year on year, yet changes reaching actual users rose only 36%. Major technical and security incidents climbed 40%, and time spent addressing them rose 70%. In June, attackers exploited Meta's AI customer support bot to access high-profile Instagram accounts, including the dormant Obama White House page.

Rebuilding Management Layers

Meta is now selectively reversing its management reduction. The company has begun asking individual contributors in its Applied AI division whether they would like to transition back into manager roles, according to Business Insider, which cited four people familiar with the matter. The move is reportedly voluntary. Around 7,000 employees were moved into Applied AI this year, some of them former managers who had taken individual contributor roles.

At a July town hall, Zuckerberg conceded the reorganisation had been mistimed and that agent technology had not advanced as quickly as he expected.

Financial Picture

Meta closed the second quarter with 75,472 employees, down 3% from the prior quarter. The company reported revenue of $60.8 billion, a 28% increase from a year earlier, while total expenses climbed 55% to $42 billion. At least $130 billion is earmarked for AI infrastructure this year.