Meta’s AI push is not just changing how work gets done. It may also be changing how many workers Meta believes it can afford.
The company is moving ahead with layoffs while raising its spending plans for AI infrastructure, a costly buildout that has rattled investors despite otherwise strong earnings. Meta has argued that AI will amplify employees rather than replace them, but its spending priorities are now sharpening questions about how the company balances people, productivity, and infrastructure costs.
That makes the layoffs less of a simple “AI took the jobs” story and more of a sign of how expensive the AI race has become.
How Meta’s AI spending is reshaping its workforce
As previously reported, Meta will begin its now-confirmed layoff of about 10% of its workforce by May 20. The layoff, which will result in around 8,000 of its staff losing their jobs, is its largest in 2026. And while there are permutations that more layoffs will likely follow, the company’s CEO has come out to say the already obvious reason for the layoffs… but with a plot twist.
According to a Forbes report, CEO Mark Zuckerberg has suggested that while AI has reduced the need for larger teams by enabling smaller teams to operate more efficiently, a deeper factor is affecting the company’s layoffs. Meta, which builds, deploys, and uses AI systems, is signaling that the rising cost of developing AI infrastructure is a major driver of the layoffs.
With new capex expected to reach up to $145 billion to support its AI-focused expansion projects, rising spending is also making investors anxious about profitability.
Following the company’s latest earnings and updated capex forecast, its stock declined by 10%, reflecting investor concerns about the justification for such spending. Although the company’s core business remains strong, Reuters says that Meta, unlike competitors like Alphabet, doesn’t have a dedicated cloud division, making the payoff from this level of spending less visible to investors.
That pressure is now feeding back into internal decisions. As investment in infrastructure climbs and investor expectations tighten, Meta is being forced to rebalance its cost structure by placing workforce reduction at the center of that adjustment.
Hiring slows as AI spending reshapes workforce strategy
Despite the ongoing job cuts, which are likely to continue, TechRadar notes that Meta hasn’t entirely frozen hiring. It had instead maintained a 1% year-on-year hiring rate, bringing in new employees across select sectors.
However, its growing investment in AI is clearly affecting those decisions. Alongside confirming it will let go of a tenth of its workforce this month, the company has also confirmed it has halted plans to hire for 6,000 new roles. Doing that signals that Meta is taking a more targeted and cautious approach with hiring.
Uncertainty on how Meta’s workforce will look
Even as it moves ahead with cutting thousands from its workforce, Meta is operating without a fixed ideal ratio for how that workforce should be structured. Company leadership has openly acknowledged that the rapid pace of AI development is making it difficult to define how many people the business actually needs.
That uncertainty matters. It means that the current layoffs are not a final adjustment, but part of an ongoing recalibration. As AI continues to improve productivity on one hand and demand more infrastructure investment on the other, the numerical balance between people and systems is still shifting in real time.
However, Zuckerberg has made clear that humans will remain. In his statement during the company’s Q1 earnings call, he said, “AI isn’t going to replace people.” But, he’s certain that “AI is going to amplify people’s ability to do what they want.”
Zuckerberg’s message is that AI will not eliminate people from Meta’s future. But the company’s latest cuts suggest that the future may still require fewer people than before, especially as infrastructure costs climb and investors demand clearer returns.
For Meta, the next test is not whether AI can make workers more productive. It is whether the company can prove that its massive AI spending will pay off before more workforce cuts become part of the plan.
For more on how AI is reshaping early careers, see our coverage of Mark Cuban’s warning that entry-level roles may shrink as companies weigh AI costs and automation.