Meta to lay off 8,000 as part of AI efficiency push
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Meta told staff Thursday it plans to lay off roughly 8,000 people, or around 10% of the company, two sources confirmed to Axios.
Why it matters: The cuts underscore how soaring AI costs are pressuring even the biggest tech companies to cut jobs to protect margins and reassure investors.
Zoom out: Meta's capital expenditures have ballooned in recent years, sparking investor concerns that excessive AI spending will eat into profits.
- In January, the company said it expects capital expenditures to soar by at least 60% this year compared with 2025, "driven by increased investment to support our Meta Superintelligence Labs efforts and core business."
- Free cash flow, meanwhile, is expected to plunge 83% year over year.
Reality check: Meta is no stranger to large-scale cuts.
- Layoffs affecting more than 20,000 workers jump-started Meta's pivot to efficiency in 2022 and 2023.
The big picture: Many Big Tech companies are eyeing layoffs as a way to appeal to investors in the AI era.
- Amazon said it would cut around 16,000 workers this year as part of a restructuring tied to its AI investments.
- Block, the parent company to Square, Cash App and Tidal, said it would cut around 4,000 — or half of its workforce.
- Salesforce announced roughly 1,000 cuts linked to AI automation.
- Snap Inc. also said it would cut around 1,000 jobs, representing around 16% of its workforce.
- Microsoft said Thursday it would offer buyouts to 7% of staff.
What to watch: The news follows a report that Meta plans to record employees' keystrokes to gather data to train its AI models, improving their ability to mimic how humans interact with computers.
