Rising AI costs force Meta to slash workforce by 20%: report

Meta is planning to carry out sweeping layoffs of about 20 percent of its workforce as AI costs have increased, according to a report from Reuters. The sweeping layoffs are a move to offset the cost of AI as the company is implementing artificial intelligence infrastructure in the tech giant's workflows.

The outlet reported that a date has not been finalized for the cuts and that the figure could change, and cited three sources familiar with the matter. Top executives have signaled to senior managers that they will need to plan on how to scale back on labor costs. Meta responded to the report, saying, "This is speculative reporting about theoretical approaches."

If Meta were to lay off 20 percent of its workforce, it would be the largest layoff since 2022, when Meta had its “year of efficiency.” As of December, the company was employing 79,000 people. In November 2022, the company let go of 11,000 staffers, which was around 13 percent of Meta’s workforce at the time.

The report comes as there have been other cuts in big tech as AI impacts the marketplace, and competition grows in the space of AI. Amazon confirmed it cut 16,000 jobs, around 10 percent of its workforce, in January. Blocks CEO Jack Dorsey pointed to AI tools and cut his company's workforce by 40 percent.

CEO of Meta, Mark Zuckerberg, has pushed to have Meta integrate generative AI. The company has brought on top AI researchers in order to accomplish their goals as well. Prior to 2028, the company had also planned to invest $600 million to build data centers, a key component to the expansion of AI.