Meta announced on Thursday that it will be reducing its workforce by approximately 8,000 employees, which accounts for about 10 per cent of its total employees. The company cited a need for greater efficiency and the desire to invest in other areas of its business as reasons for the layoffs. It was reported that around 6,000 of the job positions will remain unfilled.
The decision to downsize comes as Meta, like many other tech companies such as Oracle, faces increasing expenses related to artificial intelligence infrastructure. The company has been on a hiring spree for AI experts at high salaries, contributing to the need for cost-cutting measures. Meta has forecasted a significant increase in expenses for 2026, ranging from $162 billion US to $169 billion US, mainly driven by infrastructure costs and compensation for AI specialists.
Analysts, including Dan Ives from Wedbush, view Meta’s layoffs as a strategic move to leverage AI technology for automating tasks previously handled by large teams. This shift is expected to streamline operations, reduce costs, and maintain productivity, necessitating a leaner operating structure. The specific locations or departments where the job cuts will occur within Meta, which has offices in Canada, remain unclear.
In a separate development, Microsoft revealed plans to offer voluntary buyouts to thousands of its U.S. employees, amounting to around 7% of its workforce in the country. The software giant, headquartered in Redmond, Wash., has been heavily investing in expanding its global network of data centers to support cloud computing services, AI systems, and productivity tools like Copilot.
Microsoft’s move to offer buyouts aligns with its ongoing efforts to optimize operations and adapt to evolving market demands. The company’s commitment to carbon-free energy investments and AI development has garnered attention, with recent reports highlighting its significant financial pledges in these areas. A memo from Microsoft’s chief people officer, Amy Coleman, outlined the voluntary retirement plan as a first-time initiative in the company’s 51-year history.