Meta's stock increased during pre-market trading following reports that the company plans to reduce its workforce by more than 20% to balance expenditures related to artificial intelligence.
A company spokesperson told CNBC, "This is a speculative report about a theoretical scenario."
The scale of AI investment by major technology firms has unsettled some investors.
According to a Reuters report on Saturday, which cited three anonymous sources familiar with the matter, executives at the tech giant have directed senior managers to begin preparing layoff plans.
As of 6:16 AM Eastern Time, Meta's pre-market share price had risen by 2.7%, after falling nearly 4% in the previous trading session.
With approximately 79,000 employees as of December 2025, the reported layoffs could affect more than 15,000 staff members.
This would mark the company's largest round of job cuts since late 2022, when CEO Mark Zuckerberg announced the elimination of 11,000 positions and scaled back hiring as part of a broader cost-reduction initiative.
When asked about the accuracy of the report, a Meta spokesperson stated, "This is a speculative report about a theoretical scenario."
The consideration of further layoffs comes as Meta intensifies its investment in costly AI infrastructure and seeks to enhance efficiency by integrating AI into operational workflows.
Several companies have already announced significant AI-related workforce reductions in 2026:
Jack Dorsey's Block disclosed plans in February to cut 4,000 jobs, stating the move aims to "automate more work with smaller, highly capable teams using AI."
Amazon reduced its workforce by 16,000 employees in January to streamline management and reduce bureaucracy, while also planning substantial AI investments.
Software firm Atlassian announced last week that it would cut 10% of its staff, or 1,600 positions, to reallocate resources toward AI initiatives.
Recent data from consulting firm Challenger, Gray & Christmas indicates that over 12,000 job cuts in the U.S. so far in 2026 have been linked to AI.
AI Expenditure Projected to Reach $135 Billion
In its fourth-quarter earnings report released in January, Meta disclosed that its AI-related capital expenditures for the year are expected to range between $115 billion and $135 billion—nearly double the 2025 figure—as it builds out new AI divisions.
This investment is part of a collective $7 trillion annual AI spending plan involving tech giants such as Amazon, Alphabet, and Microsoft.
These plans have raised concerns among some investors that such high levels of spending may be unsustainable relative to the current revenue generated by AI.
Zuckerberg has stated that 2026 will be a critical year for AI, with company investments focused on his stated mission of "building personal superintelligence."
Last year, Meta invested $14.3 billion in Scale AI and eventually recruited its CEO, Wang Xiliang, along with several key engineers and researchers.
Analysts at Jefferies wrote in a Sunday report, "If Meta is willing to undertake layoffs of this magnitude while significantly increasing AI investment, we see this as indicative of a broader shift where AI is increasingly driving productivity." They added, "This has significant implications not only for Meta but for the entire internet and software industry, as investors reassess the relationship between employee count, growth, and profit margins… It is clear that these layoff considerations are partly intended to offset the sharp rise in AI infrastructure costs."
Comments