Meta told staff Thursday it plans to lay off roughly 8,000 people, or around 10% of the company, two sources confirmed to Axios. The cuts come as soaring AI costs pressure even the largest tech firms to reduce headcount and reassure investors. Meta's capital expenditures have ballooned recently, sparking concerns that excessive AI spending will erode profits.
These layoffs are the latest in a series of large-scale reductions at Meta. The company previously cut more than 20,000 workers in 2022 and 2023 as part of a pivot to efficiency. Now, AI cost pressures are driving a new wave of job cuts across Big Tech.
In January, Meta said it expects capital expenditures to climb at least 60% this year versus 2025, driven by investments in its Meta Superintelligence Labs and core business. Free cash flow is projected to plunge 83% year over year. The cuts aim to offset these financial headwinds.
Amazon announced it would cut around 16,000 workers this year in a restructuring tied to AI investments. Block, parent of Square and Cash App, said it would reduce headcount by about 4,000. The trend highlights how AI's rising costs are reshaping workforce strategies across the industry.
Critics argue that layoffs may harm long-term innovation by losing talent needed for AI development. Some analysts question whether cost-cutting alone can sustain margins without revenue growth.