Meta’s stock jumped more than 3% in early Monday trading on news that Mark Zuckerberg’s company is planning to cut more than 20% of the company’s workforce as it ramps up spending on artificial intelligence.
Senior employees at the tech giant have been told to start preparing for the layoffs — which could affect some 15,000 workers — Reuters reported, citing sources with knowledge of the matter. The move would mark Zuckerberg’s largest job cuts since Meta slashed more than 20,000 jobs in late 2022 and early 2023 as part of its infamous “year of efficiency” push.
“This is a speculative report about theoretical approaches,” a Meta spokesperson told The Post when asked about the Reuters report.
Meta hasn’t settled on a date for when the layoffs will occur and the magnitude of the round could change, according to Reuters. The company had nearly 79,000 employees as of Dec. 31, company filings showed.
Zuckerberg and other Big Tech honchos are spending unprecedented sums as they scramble to win the high-stakes race to develop advanced AI models.
Meta expects to spend as much as $135 billion in 2026 alone – twice as much as it did just a year ago. Investors have long been concerned that Zuckerberg is spending too much on the fledging technology.
The company’s shares have slid nearly 20% over the past six months, falling from about $764 in mid-September to roughly $613 by mid-March.
As of last week, Meta was reportedly forced to delay the rollout of its next AI model, dubbed “Avocado,” due to performance issues.
A 20% cut to Meta’s layoffs could be just the start of wider cullings – especially if the company begins relying on AI to handle work traditionally performed by humans, according to Rosenblatt Securities analyst Barton Crockett.
He said the proposed cuts could generate about $6 billion in cost savings and produce a 5% boost to Meta’s adjust core earnings.
“This doesn’t have to stop at 20%,” Crockett told Reuters. “There could be more down the road if AI is truly this impactful on staff productivity.”
Wall Street will be watching closely to see if AI-related layoffs accelerate in the months and years ahead.
Amazon axed 16,000 workers in January while suggesting that AI could perform the laid-off employees’ tasks.
Elsewhere, Twitter co-founder Jack Dorsey last month slashed more than 4,000 employees at his fintech company Block, or about 40% of its overall workforce.
At the time, Dorsey eerily suggested that more companies will follow in Block’s footsteps.
“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively,” he said.
Credit: Source link
