Meta plans to cut a tenth of its workforce, laying off about 8,000 workers, as the global tech giant invests heavily inartificial intelligence.
The company, which owns Facebook, Instagram and WhatsApp, told staff in an internal memo on Thursday, US time, announcing the layoffs will go into effect May 20.
Meta, which has a taskforce of 78,000 employees, also said will scrap 6,000 open roles it had intended to fill.
In the memo, Meta’s chief people officer, said the cuts were needed to offset spending.
“We’re doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making,” Janelle Gale, Meta’s chief people officer, said in the memo, according to Bloomberg News, which first reported the memo.
“This is not an easy trade-off and it will mean letting go of people who have made meaningful contributions to Meta during their time here.”
Meta’s AI race
The move comes as co-founder and chief executive Mark Zuckerberg makes a priority of delivering “superintelligence” in a costly AI race against rivals including Amazon, Google, Microsoft and OpenAI.
Most analysts believe Meta will make the investment pay off by improving advertising efficiency and creating new opportunities, such as with its smartglasses through a partnership with Ray-Ban maker EssilorLuxottica.
Meta in January reported quarterly earnings that topped market expectations, as revenue grew along with investments in AI.
Meanwhile costs tallied US$35.15 billion ($49 billion), an increase of 40 per cent from the same period a year earlier, the earnings report noted.
Capital expenses, including infrastructure such as data centres to power AI, were US$22.14 billion ($30 billion) in the quarter, according to the company.
Meta anticipated capital expenditures in the US$115 billion to US$135 billion ($161 – $189 billion) range this fiscal year, driven by increased investment in Meta Superintelligence Labs and its core business.
“I’m looking forward to advancing personal superintelligence for people around the world in 2026,” Mr Zuckerberg said on an earnings call.
Microsoft reportedly planning to offer voluntary buyouts
Reports on Thursday, US time, also indicated that Microsoft is looking to trim its ranks and offer voluntary buyouts to over 8,000 employees in an unprecedented move by the tech giant.
The offer is aimed at workers at the senior director level or lower whose years of employment and age add up to 70 or more, according to a CNBC report.
Microsoft, which has also been pouring billions of dollars into AI, did not respond to a request for comment by AFP.
The company announced this week it will invest $25 billion into boosting Australia’s supercomputing and AI capacity over the next three years, in its biggest investment in the country.
Microsoft said the investment would go into expanding its Azure AI supercomputing and cloud infrastructure while working with the AI Safety Institute.
Announcing the investment, Prime Minister Anthony Albanese spruiked his government’s National AI Plan as being “all about capturing the economic opportunities of this transformative technology while protecting Australians from the risks”.
“Microsoft’s long-term investment in our national capability will help deliver on that plan – strengthening our cyber defences and creating opportunity for Australian workers and businesses,” he said.
Microsoft chairman and chief executive Satya Nadella said Australia had “an enormous opportunity to translate AI into real economic growth and societal benefit”.
“That is why we are making our largest investment in Australia to date, committing $25bn to expand AI and cloud capacity, strengthen cyber security and expand access to digital skills across the country,” he said.
Meta and Microsoft are both set to report quarterly earnings next week.
