Meta Cuts About 700 Jobs as AI Spending Takes Priority

Layoffs Begin

Meta has started laying off employees as it redirects more of its cash toward building datacenters, training its own large language models, and recruiting AI talent. A person familiar with the cuts told The Register they would number about 700.

According to The Information, the job losses fall hardest on Meta's Reality Labs, its social media division, and recruitment. One departing senior recruiter wrote on LinkedIn that her role was impacted by the reduction in force.

Company Statement

In a statement to The Register, Meta said the reduction in force is about streamlining the business to work more effectively with AI, as laid out by CEO Mark Zuckerberg during earnings reports in January. A spokesperson said teams across Meta regularly restructure or implement changes to ensure they are in the best position to achieve their goals, and that where possible the company is finding other opportunities for employees whose positions may be impacted.

In a post-earnings note on January 28, Zuckerberg said this was the year Meta would begin flattening teams. He wrote that the company is elevating individual contributors and flattening teams, and that it is starting to see projects that used to require big teams now be accomplished by a single very talented person. He added that he wants as many of these very talented people as possible to choose Meta as the place they can make the greatest impact.

Contrasting Reports

Reuters reported recently that Meta plans to lay off 20 percent of its workforce, some 15,000 employees, but the layoffs that have reportedly begun this week are on a smaller scale thus far. Meta said it had 78,800 employees as of the end of January. If Meta were to follow through with a 20 percent cut, it would mean the elimination of about 15,000 jobs and bring Meta's headcount to its lowest point since 2021, when it had about 58,600 full-time employees.

AI Spending

Meta has dramatically increased spending in recent years to keep up in the AI arms race, focusing on building its own AI infrastructure and datacenter properties to match competitors Anthropic, Google, and OpenAI. Expenses rose 24% during 2025 to $118 billion, and the company has said it plans to spend between $162 billion and $167 billion this year, although it expects operating income to increase, meaning revenue will grow faster than expenses. Of that, capital expenditures, including datacenter buildouts to power its AI efforts, will amount to between $115 billion and $135 billion.

The company is also designing its own custom chips for GenAI workloads, which it plans to build over the next two years. The first of its in-house MTIA chips was released in 2023. Meta said the MTIA 300 will be used for ranking and recommendations training and is already in production, while MTIA 400, 450 and 500 will be capable of handling all workloads, but the company will primarily use these chips to support GenAI inference production in the near future and into 2027.

The release of Meta's next reasoning model, code-named Avocado, has reportedly been delayed after delivering underwhelming results during internal tests, according to the New York Times. That news comes even as Meta offered dramatic nine-figure pay packages to lure AI researchers from competitors last year, with OpenAI defectors reportedly commanding $100 million sign-on bonuses. Zuckerberg also invested $14 billion in Scale AI and tapped its co-founder Alexander Wang to lead Meta's AI efforts. Wang reportedly clashed with Meta's former chief AI scientist Yann LeCun, who called Wang young and inexperienced.

Sources

• Meta cuts about 700 jobs as it shifts spending to AI • The Register
• Meta lays off nearly 1,400 Washington employees in latest tech workforce cut: Check worst-hit departments, severance package and more - The Economic Times