Staff are being encouraged to work from home while the company cuts roughly 8000 roles globally.
This latest round of cuts is expected to hit Meta’s engineering and product teams in particular and additional layoffs could come later in the year, said people familiar with the company’s plans, who asked not to be named as the information is not public.
“Automators like Meta risk no longer being an employer of choice as it’s being revealed that they will cut out the human when the opportunity presents itself,” Jan-Emmanuel De Neve, professor of economics and behavioural science at the University of Oxford, said.
“Doing so might well lead to short-term cost savings but risks longer-term growth potential by undermining employee wellbeing and engagement.”
On Monday local time, Meta informed staff that some 7000 workers have also been reassigned to newly formed teams that are focused on AI initiatives, including products and agents.
The company, which has committed well in excess of US$100 billion ($170b) to AI capital expenditures this year, had just under 80,000 employees at the end of March, before the reassignments and layoffs.
“We’re now at the stage where many orgs can operate with a flatter structure with smaller teams of pods/cohorts that can move faster and with more ownership,” Meta’s head of people Janelle Gale said in the memo, which was reviewed by Bloomberg News.
“We believe this will make us more productive and make the work more rewarding.”
Chief executive Mark Zuckerberg has made AI the company’s top priority, committing all resources to keeping pace with rivals like Alphabet Inc.’s Google and OpenAI.
That’s led to changes to Meta’s workforce and the way it operates. The company has gone through waves of layoffs over recent years, as Zuckerberg has pushed for increased efficiency.
He has encouraged engineers to use AI agents to assist with coding and other tasks, outlined plans to track employees’ devices to improve the technology, and spent time coding his own AI-powered assistant to handle some of his duties, like soliciting employee feedback.
These changes have left Meta employees both frustrated and anxious.
More than a thousand have signed a petition addressed to Zuckerberg and other leaders of the company demanding that it refrain from collecting their data from devices – which can be as granular as gathering keystrokes, mouse movements and screen content – in the effort to train AI.
Others have taken to social media to post about how the threat of layoffs has impacted their work and morale.
Meta’s aggressive spending on AI has caused concern among investors, who worry that the company’s investment may not ultimately pay off.
While Meta has framed the layoffs as an opportunity to “offset” the cost of some of its major AI investments, analysts at Evercore estimate the cuts will generate only about US$3b in savings.
That’s just a small portion of Meta’s projected capital expenditures this year, which could hit US$145b, and the additional hundreds of billions that the company anticipates spending on AI infrastructure before the end of the decade.
– With assistance from Shona Ghosh and Jennifer Duggan.
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