Mark Zuckerberg told investors in January that AI would dramatically change the way people work, and three months later he's backing it up with 8,000 pink slips. Meta confirmed Thursday that it will cut about 10% of its workforce, scrap plans to hire 6,000 more people, and redirect the savings into Meta Superintelligence Labs and its core business.
Layoffs begin May 20, with most US employees receiving 16 weeks of base pay plus an extra two weeks for every year of service. International severance is structured similarly, though exact terms vary by country.
The company is also walking away from 6,000 open roles it had previously planned to fill, which shaves a second, quieter layer off the future headcount budget. Meta described the move as an effort "to run the company more efficiently and to allow us to offset the other investments we're making." Translation: the AI build-out is expensive, and it's funded partly by the people being let go.
Here's the number that matters for investors. Meta's 2026 capital expenditures - the money it spends on things like servers, chips, and data centers - will land between $115 billion and $135 billion, up from $72.2 billion in 2025.
That's an increase of roughly $60 billion in a single year, and most of it is heading into Meta Superintelligence Labs. Zuckerberg laid the groundwork for the shift on the January earnings call, saying "projects that used to require big teams now be accomplished by a single very talented person." The layoffs suggest he meant every word.
Why now: Meta wants to show investors it's getting ahead of the AI capex crunch rather than reacting to it. Running leaner while spending more signals confidence to Wall Street, even if the internal cost is real.
Microsoft announced its own first-ever voluntary retirement program the same day, targeting about 7% of its US workforce. Two of the five biggest tech companies in the world reshaped their workforces on the same Thursday, and both point to the same underlying force: AI capital spending is rewriting the cost structure of big tech.
The pattern is not limited to Meta and Microsoft. Amazon, Google, and Salesforce all cut headcount over the past year while raising AI investment guidance.
What's new is the scale, and the fact that these companies are doing it even as their core businesses keep generating record cash.
Meta's Q2 earnings, due in late July, will be the first chance to see how the cuts land on the bottom line. Watch for operating margin movement and any update to the 2026 capex range.
The size of the AI bet only pays off if the company can fund it without spooking investors about growth.
