TLDR
- Meta is considering workforce reductions that may eliminate approximately 20% of employees — around 16,000 positions
- The reductions aim to balance a planned $600 billion AI infrastructure investment extending to 2028
- Mark Zuckerberg has directed senior leadership to develop strategies for reducing employee headcount
- The company has recently completed the acquisition of AI agent platform Moltbook and committed $2 billion to Chinese AI startup Manus
- Internal assessments indicate Meta’s “Avocado” AI model has underperformed against benchmarks
Meta Platforms is developing plans for what could become its largest workforce reduction since 2022, potentially eliminating 20% or more of its employee base. Based on the nearly 79,000 employees Meta disclosed at the close of December, this would affect approximately 16,000 positions.
Reuters published the report Thursday after consulting three sources with knowledge of the situation. The company has yet to finalize either timing or exact numbers. A Meta representative characterized the reporting as “speculative” and focused on “theoretical approaches.”
The workforce reduction strategy connects directly to Meta’s substantial artificial intelligence investments. The company has pledged to allocate $600 billion toward data center construction through 2028 — a financial commitment that requires corresponding cost reductions in other areas.
Zuckerberg has articulated his vision clearly. During January remarks, he noted witnessing “projects that used to require big teams now be accomplished by a single very talented person.” This represents the efficiency narrative Meta is advancing.
Senior executives have already instructed team leaders to begin developing plans for reducing their departments, according to two sources who spoke with Reuters. While still in preliminary phases, the strategic direction has been established.
Meta’s AI Spending Spree
The workforce adjustments represent one component of a broader transformation. Meta has deployed significant capital to maintain competitiveness in generative AI. The company completed its acquisition of Moltbook, a social platform designed for AI agents, this week. Additionally, Meta is investing at least $2 billion in Chinese AI startup Manus.
To attract premier AI researchers, Meta has extended compensation packages valued at hundreds of millions of dollars over four-year periods to scientists joining its superintelligence division.
The situation presents a paradox: the same AI investments driving aggressive recruitment may simultaneously necessitate job eliminations elsewhere. The expense of constructing AI infrastructure compels the organization to operate with reduced staffing in other divisions.
Should the 20% reduction materialize, this would surpass Meta’s “Year of Efficiency” restructuring in scope. That initiative eliminated 11,000 positions in November 2022, with an additional 10,000 cuts following in early 2023.
Meta follows an industry-wide trend. Amazon announced 16,000 job eliminations earlier this year. Block removed nearly half its workforce, with CEO Jack Dorsey explicitly attributing AI tools as enabling reduced staffing requirements.
Avocado and the AI Performance Gap
Despite substantial financial commitments, Meta’s AI initiatives have encountered challenges. Its Llama 4 models faced criticism last year after generating misleading outputs on initial benchmarks. The largest variant of that model, designated Behemoth, was discontinued before its scheduled summer launch.
The superintelligence division currently focuses on developing Avocado, a new model intended to demonstrate Meta’s AI capabilities. However, internal assessments indicate this model has also underperformed relative to expectations.
Bernstein analysts have identified a “trough of disillusionment” regarding consumer AI adoption — a framework that applies to Meta’s current product positioning.
META stock declined 3.83% during Thursday’s trading session following the news, though shares recovered slightly in after-hours activity as investors evaluated the potential margin implications of reduced headcount.
The baseline figure comes from Meta’s December regulatory filing, which listed 78,900 employees. A 20% reduction would bring total staffing to approximately 63,000.
