Meta (META.US) Plans 20% Workforce Reduction: "AI Replacement" to Optimize Human Resources Structure, Support Massive Capital Expenditures

Meta (META.US) is planning to initiate large-scale layoffs that could affect 20% or more of the company’s workforce, involving approximately 16,000 jobs. The parent company of Facebook aims to offset its high investments in artificial intelligence and prepare for further efficiency gains brought by AI-assisted employees. It is reported that Meta plans to spend up to $600 billion on AI capital expenditures by 2028.

According to three informed sources, the company has not yet finalized the layoff date, and the scale of layoffs is still undecided. Two of them stated that senior management has recently communicated this plan in discussions with other senior leaders and has asked them to start planning how to implement the layoffs.

Despite Meta’s commitment to transforming into an “AI-driven” company, its core model development has recently faced significant setbacks, further intensifying internal restructuring pressures. Due to the underperformance of the Llama 4 series models in benchmarks last year, Meta was forced to abandon the planned summer release of the large-scale “Behemoth” version.

Additionally, internal projects codenamed “Avocado” and “Mango,” ultra-intelligent models that failed to break performance thresholds, have had their release postponed to May 2026. This delay in development progress and the high costs involved have raised concerns among investors about whether the company can turn AI investments into actual profit growth in the short term.

Regarding these plans, Meta spokesperson Andy Stone responded that reports of large-scale layoffs are speculative based on theoretical scenarios. According to Meta’s latest 10-K filing, as of December 31, 2025, the company has approximately 79,000 employees.

If finalized, a 20% layoff would be the largest since Meta’s restructuring plan from late 2022 to early 2023, when the company cut over 20,000 jobs. Prior to that, a hiring spree had doubled its employee count compared to 2020.

However, Meta’s move is not an isolated case but reflects the broader transformation pains in the tech industry. In January this year, Amazon laid off about 16,000 employees, and Jack Dorsey’s Block recently cut nearly half of its positions. These giants generally believe that with the application of AI automation tools in internal workflows, the need for large-scale staff has diminished.