The AI giant, Meta Platforms, Inc., is reportedly planning a large-scale workforce reduction. On the local Friday trading day, Meta's stock price fell nearly 4% on the U.S. market, resulting in a single-day market capitalization loss of $61.9 billion (approximately RMB 437 billion). The company's total market value decreased to $1.55 trillion, roughly equivalent to RMB 10.69 trillion. Reports emerged suggesting that to counter surging AI costs, Meta intends to reduce its workforce by 20% or more. As of the end of last year, Meta employed close to 79,000 individuals.
Concurrently, Elon Musk's xAI is undergoing a period of instability, with several of its co-founders departing successively. Out of an initial twelve co-founders, only two currently remain with the company. Additionally, xAI's closely watched AI agent project, codenamed "Macrohard," has reportedly stalled.
**Meta Platforms, Inc. Potentially Cutting at Least 20% of Workforce**
According to information from Reuters, multiple sources familiar with the matter disclosed that Meta is preparing for a significant round of layoffs, potentially affecting 20% or more of its total employee count. This move is intended to offset the high costs associated with artificial intelligence infrastructure investments and to prepare for a transition where AI-assisted tools enhance workforce efficiency. Reportedly, the specific timing for the layoffs has not been finalized, nor has the ultimate scale been determined. Two of the informed sources indicated that Meta's senior leadership has recently communicated the layoff plans to other senior managers, instructing them to begin formulating downsizing strategies.
In response to the report, Meta spokesperson Andy Stone stated, "This is speculative reporting on theoretical scenarios." If Meta proceeds with a 20% reduction, it would represent the most substantial personnel adjustment since the company's "Year of Efficiency" restructuring between late 2022 and early 2023. Based on the latest financial report, the company's headcount was nearly 79,000 as of December 31 last year. In November 2022, Meta laid off 11,000 employees (approximately 13% of its workforce at the time), followed by an announcement roughly four months later to cut an additional 10,000 positions.
Over the past year, Meta's CEO Mark Zuckerberg has consistently pushed for the company to strengthen its competitive position in the generative AI sector. The company has offered substantial compensation packages, some reaching hundreds of millions of dollars over four years, to attract top AI researchers to join a new super-intelligence team. Meta plans to invest $600 billion in data center construction by 2028 and recently acquired the AI agent-focused social platform Moltbook earlier this week. The company also spent at least $2 billion to acquire the Chinese AI startup Manus. Zuckerberg has hinted that these investments will lead to efficiency gains, stating in January that he has observed "projects that previously required large teams can now be accomplished by a single outstanding individual."
Meta's planning reflects a broader trend among major U.S. corporations, particularly in the tech sector, this year, where executives view recent advancements in AI systems as a catalyst for transformation. Amazon confirmed layoffs of approximately 16,000 employees (about 10% of its workforce) in January, and last month the fintech company Block cut nearly half of its staff, with its CEO Jack Dorsey explicitly citing AI tools enabling the company to achieve higher output with leaner teams.
As Meta advances its AI investments, its Llama 4 model faced a series of setbacks last year, including criticism for misleading benchmark results from an early version. The company abandoned plans to release its largest version, codenamed "Behemoth," scheduled for summer. This year, the super-intelligence team has been working on a new model named "Avocado" to re-establish the company's standing, but this model's performance has also lagged behind expectations.
**Significant Turmoil at Musk's xAI**
Elon Musk's artificial intelligence startup, xAI, is experiencing a period of upheaval, marked not only by the successive departures of co-founders but also by controversies surrounding its Grok chatbot. Musk has acknowledged that the company requires deep restructuring. Less than six weeks after a proposed $1.25 trillion merger deal between SpaceX and xAI, Musk conceded that the AI startup needs to be "rebuilt from the ground up." He made this declaration via the social platform X amidst a wave of co-founder departures.
This past Thursday, xAI co-founder Guodong Zhang announced his departure. Haotian Liu, an xAI colleague who worked closely with Zhang, also stated he had left the company earlier in the week. With these departures, only two of the original twelve co-founders remain. Addressing the situation, Musk reportedly stated during a February all-hands meeting that some individuals were "better suited for the company's early stages rather than its later phases." However, reports indicate that some departed engineers are collaborating on new ventures, a development that hints at deeper internal conflicts at xAI.
Media reports citing informed sources suggest that management from SpaceX and Tesla Motors have been tasked with reviewing the work of xAI employees and have already terminated some personnel. In a post on social media platform X on the evening of the 12th, Eastern Time, Musk stated, "xAI wasn't built correctly the first time, so it's currently being rebuilt completely from scratch. Tesla went through the same thing."
Compounding the issues, xAI's notable AI agent project, Macrohard, was reported to have stalled as of this past Wednesday, following the departure of its lead, xAI co-founder Toby Pohlen.
This personnel turmoil at xAI coincides with SpaceX's preparations for a potentially historic IPO. In the recently disclosed merger proposal, SpaceX was valued at $1 trillion, while xAI was valued at $250 billion. Meanwhile, the company is bringing in new engineers like Andrew Milich and Jason Ginsberg from the startup Cursor, while simultaneously reducing positions, reportedly influenced by observing rapid progress in programming tools from OpenAI and Anthropic. Musk also admitted that the hiring process may have missed some qualified candidates and stated that the company is re-reviewing past applications to re-establish connections.
xAI also faces multiple controversies related to its Grok chatbot and an image generator, which has been accused of being able to create non-consensual synthetic images based on real photographs. Despite these controversies, the company has successfully secured contracts with U.S. government agencies and continues to invest in energy and data infrastructure in locations like Memphis. Tesla Motors is deepening its collaboration with xAI by integrating Grok into its vehicle systems and supplying energy storage equipment for xAI data centers.
Comments