This article first appeared on GuruFocus.
Meta Platforms (NASDAQ:META) is pushing deeper into its AI-first reset as the company begins notifying thousands of employees that they are being laid off. The cuts started Wednesday morning across Asia, with employees receiving notices at 4 a.m. Singapore time, while US-based staff are expected to be notified during their morning. The company is encouraging staff to work from home as it cuts roughly 8,000 roles globally, with engineering and product teams expected to be hit in particular. Additional layoffs could also come later in the year, according to people familiar with the company’s plans.
The move comes as Mark Zuckerberg continues to make AI the center of Meta’s next operating model. On Monday, Meta told employees that about 7,000 workers had been reassigned to newly created teams focused on AI initiatives, including products and agents. The company had just under 80,000 employees at the end of March, before the reassignments and layoffs. Meta’s Head of People Janelle Gale said many organizations can now operate with flatter structures and smaller teams that move faster with more ownership, framing the reset as a productivity push as the company directs more resources toward AI.
For investors, the key tension is cost discipline versus the size of Meta’s AI spending commitment. Meta has committed well over $100 billion to AI capital expenditures this year, while projected capital expenditures could reach $145 billion. Evercore analysts estimate the layoffs could generate about $3 billion in savings, which would only offset a small portion of Meta’s broader AI infrastructure buildout. That leaves investors watching whether Zuckerberg’s aggressive AI pivot can eventually justify the spending, especially as employee anxiety, internal pushback over data collection, and morale concerns add another layer of execution risk.