5
Meta told employees that the company would cut around 10% of its workforce, almost 8,000 jobs, starting May 20. This move is part of a broader restructuring plan previously announced. In addition, the company is eliminating around 6,000 vacancies.
In an internal memo, Chief People Officer Janelle Gale explained that the layoffs would help the company “balance the other investments we are making.” Although she didn’t mention AI directly, the company has aggressively increased its AI spending.
CEO Mark Zuckerberg had previously pointed to significant AI acceleration, revealing plans to invest between $115 billion and $135 billion in AI, almost double the previous year’s capital spending. “This is not an easy compromise,” Gale wrote, adding that affected employees would receive large severance packages. However, Zuckerberg was more direct about the role of AI in reducing the need for hiring. “We’re starting to see projects that once required large teams now being carried out by a single, very talented person,” he said.
Microsoft offers takeovers instead of outright layoffs
Unlike meta, Microsoft does not carry out immediate mass layoffs, but rather reduces staff through voluntary retirement offers. The company has a buyout option for approximately 7% of its U.S. workforce, which totals approximately 125,000 employees. These offers are aimed primarily at long-term employees, especially those whose total age and length of service is 70 years or more. Reports suggest that more than 8,000 employees could be eligible for this program.
Massive AI spending is driving changes in the workforce
Both companies are investing heavily in AI infrastructure. Microsoft had previously expected to spend around $100 billion on AI, and analysts now estimate that number could rise to $110 billion to $120 billion. Mustafa Suleyman said in February that AI could replace most white-collar jobs within the next 12 to 18 months.
CEO Satya Nadella has also highlighted how AI is transforming operations. He revealed that AI is already doing almost 30% of Microsoft’s coding work. “We are only at the beginning of AI adoption and Microsoft has already built an AI business that is larger than some of our largest franchises,” he said.
AI reduces the need for human workers
Zuckerberg expressed similar sentiments and suggested that AI could soon take over a large part of the development work. “Our bet is probably that next year half of the development will come from AI, not humans, and it will only increase from there.” These developments have raised concerns among technology workers about job security as AI continues to evolve.
Industry is investing heavily in AI with a high trend towards job cuts
Meta and Microsoft are not alone. Several major tech companies are cutting jobs while investing heavily in AI:
- Jack Dorsey reduced nearly half of his company’s workforce, citing efficiencies in AI.
- Amazon has laid off at least 30,000 employees in the last six months while planning to invest around $200 billion.
- oracle has also announced thousands of job cuts due to financial pressure from large investments in data centers.
In short: The shift towards artificial intelligence is rapidly changing the technology industry. Just the way companies like it Metaplatforms And Microsoft They are investing billions in AI and are also transforming their workforce, signaling a future where automation plays a much larger role in daily operations.
