Meta Reportedly Halted Second AI Restructuring Wave After 10% Layoffs

AI restructuring plans

Meta developed an internal restructuring initiative called Project OT, short for Organization Transformation, that aimed to reshape work at the company around artificial intelligence, Reuters reported.

According to internal planning material reviewed by Reuters and people familiar with the project, the plan envisaged AI taking on much of the routine work performed by thousands of employees. Smaller groups of staff would oversee virtual workers under the proposed model.

The project also included scenario planning for team reductions. Reuters reported that executives examined reducing the size of many teams by as much as 60%. Meta said those scenarios applied to some teams, not its entire workforce, and included redeployments as well as potential layoffs.

Two planned waves

Internal documents seen by Reuters described a restructuring in two waves, with an initial round planned for May and another shake-up planned for November. The measures under consideration also included closing vacant positions and managing out employees Meta considered poor performers.

One human-resources executive projected that the cuts could be as big as or bigger than Meta's reductions of around 25% three years ago, according to an internal document cited by Reuters. Meta later said it did not proceed with every scenario considered during the exercise.

On the night of May 19, hours before the first planned layoff wave, Meta changed course, Reuters reported. The company cut 10% of its employees the following day and cancelled planning for the November round, according to an internal document reviewed by Reuters.

Meta said leaders cancelled the second wave before deciding how many employees would lose their jobs overall.

Employee concerns and productivity questions

Reuters reported that employees had become openly opposed to the plans, with concerns that the AI transformation was intended in part to replace staff. Internal data was also indicating that autonomous AI agent technology central to the strategy was not delivering the expected productivity gains, according to the report.

The report said some investors were questioning Meta's AI spending and what the company had achieved from it.

Meta confirmed Project OT existed and described it as a year-long effort focused on cutting costs, redesigning team structures and moving staff into priority work, including producing training data for AI models. The company said thousands of employees were moved to newly established teams.

Meta did not identify the units involved in the most severe scenarios and said several major units were not included. Reuters said it was unable to determine what specifically caused Mark Zuckerberg to change course or what Meta's current plans are.

Sources

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