Meta’s stock climbed nearly 3% in premarket trading Thursday, a reaction to reports that the company is preparing to cut over 20% of its workforce. According to sources speaking to Reuters, executives have directed senior leaders to draft plans for the reductions, which could affect more than 15,000 of the 79,000 employees Meta reported at the end of 2025.

The move, if executed, would be the company's largest round of layoffs since 2022. It comes as Meta plans to spend between $115 billion and $135 billion this year on artificial intelligence infrastructure, a figure that doubles its 2025 investment. A company spokesperson called the report "speculative."

Meta is not alone in pairing workforce restructuring with aggressive AI investment. This year, Amazon cut 16,000 jobs, and Jack Dorsey’s Block announced 4,000 layoffs, with both companies citing efficiency gains from AI. According to Challenger Gray & Christmas, AI has been cited in over 12,000 U.S. job cuts so far in 2026.

Analysts see a clear connection. "If Meta is willing to reduce headcount at this scale while ramping AI investment, it signals a broader shift," noted Jefferies in a Sunday report. The firm suggested the cuts are partly intended to offset soaring infrastructure costs.

CEO Mark Zuckerberg has called 2026 a pivotal year for AI, focusing on what he terms "personal super intelligence." The spending is part of a massive $700 billion push by major tech firms, including Microsoft and Alphabet, into the technology. This scale of investment has some investors questioning the balance between expenditure and the current revenue AI generates.

Source: CNBC