Meta Considers 20% Workforce Cuts Amid $135B AI Spending

META is reportedly considering cutting up to 20% of its roughly 79,000-person workforce as part of a sweeping restructuring to fund its $115–$135 billion AI capital expenditure plan for 2026. The potential layoffs, first reported by Reuters, would affect approximately 15,000 employees and represent the largest headcount reduction since Meta's 2022 "Year of Efficiency" campaign. Meta characterized the reporting as speculation about "theoretical approaches" but did not deny the discussions.

Wall Street responded favorably to the news, with Meta shares climbing roughly 3% as investors weighed the potential for approximately $6 billion in annual cost savings. J.P. Morgan noted that while the layoffs could improve margins, they may not substantially offset the massive AI infrastructure buildout. The company's AI spending commitment — up from $72 billion in 2025 — underscores the scale of Meta's bet on generative AI and large language models.

The workforce reduction raises questions about Meta's ability to retain top AI and engineering talent in a fiercely competitive hiring market. However, the restructuring follows the same playbook that drove a multi-year stock rally after 2022 layoffs, and analysts have grown more bullish in the wake of the reports. The news also coincides with Meta's ex-dividend date on March 16, adding to positive investor sentiment around the stock.