Meta will lay off 10% of employees, just days after announcing controversial workplace tracking decision
Earlier this week, social giant Meta Platforms made noise after a memo to its employees said that it would install software on its employees' computers to train AI tools.
Internally, it was understandably controversial, as there's no way to "opt out" of task tracking. Externally, it's likely to become a study for other companies thinking about doing something similar. But although the move likely runs aground of privacy regulations or stipulations in employment law, the undertones are obvious.
Related: Mark Zuckerberg sends shocking message to Meta employees
After months of rumor and speculation, the memo served as an admission that Meta would be training AI replacements for its thousands of employees. Now, it appears to be a starting gun for layoffs.
Meta announces May layoffs
On Thursday, Meta told employees that it would lay off 10% of the company, or about 8,000 jobs. Decisions will land on May 20, the latest in a row of downsizings at the company. In addition, Meta says that it will not hire for 6,000 open roles.
Meta Chief People Officer Janelle Gale says that the move is part of a "continued effort to run the company more efficiency." As part of the move, Meta says that it will not hire for over 6,000 roles which it intended to hire for.
What costs more: Hardware or humans?
Despite purporting that the layoffs are a matter of efficiency, Meta Platforms has struggled to keep its headcount down. The company's headcount nearly doubled from the end of 2019 to 2022, rising from 44,942 to 86,482. After sizable layoffs in 2023, Meta's headcount returned to growth in 2024 and 2025.
That underscores one of the other reasons for the layoffs: Meta's investments in AI, which Gale acknowledges in the memo in saying that they will, "allow us to offset the other investments we're making." That is largely expected to refer to its planned $600 billion investment in data centers.
That spend-a-thon is already breaking the bank for Meta, which burned through the majority of its cash on hand in 2025, tapped the private credit circuit to raise $29 billion for data centers, and is raising red flags with its own auditor over how its investments fit on the balance sheet.
Reality Labs
It's not the first time this year that Meta has shifted resources from one business to its AI ambitions. In January, Meta cut over 1,000 jobs from its beleaguered Reality Labs division as it pivoted from one unprofitable business to another. That was about 10% of the VR and AR-focused group, which has run up a $100 billion loss since spinning out as a separate business unit during the pandemic.
Meta's AI ventures are already surpassing that total, even as the company lags competitors like Google, Anthropic, and OpenAI. That's especially ironic because Meta's LLaMa AI models were, at one point, industry leading. But after falling behind, the company spent $14 billion to acquire a minority stake in data-labeling company Scale AI.
How can Meta's move pay off?
Meta is late to the party, but their spending indicates that they expect this is a game of resource accumulation. They might not have a consumer product like their competitors; they don't even have a frontier model ready for prime time. But with enough spending, they suspect that they can play ball in the congested AI ecosystem.
However, it remains unclear if Meta's latest "efficiency" layoffs are because of AI or in spite of it. At this stage, Meta concedes that it's about "efficiency" (a/k/a: saddling less employees with more work; or, alternatively, just focusing on business areas of interest and not doing a whole lot else.) However, it also admits that it's about affording its AI investments without significantly affecting its financial performance.
The problem with the aforementioned is that both are terrible for morale. Employees are now on notice that they'll make themselves redundant.
If that investment works out for Meta, that's problematic for the state of white-collar work. When companies downsize, historically, there is a loss of institutional knowledge and resources. But with a new AI hawk to retain that knowledge (and even do the job), neither of those things may be a worry. It means that these layoffs might just be the starting gun.
There is, of course, the possibility that it doesn't work out --- at least not over the horizon that Meta hopes. Many AI labs are struggling to rein in costs, and where they have, there has been an observable decline in the quality of models. This is not especially bullish for the intermediate-term prospect of AI models as "replacements" for human labor; at best, they still look like expensive tools.
In which case, you'd probably expect that Meta's headcount will get back to growing next year...
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This story was originally published April 23, 2026 at 12:02 PM.