Meta is pushing all its chips into the AI pot, and it’s ready to cut jobs to cover the bet.
Driving the news: Meta is reportedly planning to lay off up to 20% of its workforce, nearly 16,000 jobs, as it continues to pare back parts of the business that don’t centre around AI, per Reuters. The company already laid off over 1,000 workers in January.
Why it’s happening: Meta has essentially given up on virtual reality headsets and the Metaverse, which CEO Mark Zuckerberg was at one point so enthusiastic about he renamed his whole company after it. Now, Meta has pivoted hard to AI, investing in data centers, acquiring startups, and luring top talent away from rivals with nine-figure salaries.
To offset the AI races’ eye-watering costs, Meta is starting to lay off workers and slash the budgets of some non-AI divisions.
Why it matters: Tech layoffs have accelerated in the last few years. Some of that is a course-correction from overhiring during the pandemic, but some of them are premised on the view that AI tools can let companies do more with fewer people.
Nearly 39,000 workers have already been laid off in 2026, which is on pace to be roughly in line with the average layoff totals from the last three years.
Earlier this month, Block cut 4,000 jobs — nearly half its workforce — with CEO Jack Dorsey pointing directly to improvements in AI tools as the reason for the cuts, though skeptics pointed to overhiring as a more important factor.
Our take: A lucky few may be getting paid $100 million to build AI models, but it's a particularly rough time to be a young tech worker. Not only are entry-level jobs the most vulnerable to layoffs, but new grad hires in the tech sector are down 50% from 2019.—LA