Meta is considering layoffs that could impact 20% or more of its employees, according to three sources who spoke to Reuters. The discussions, which have not been finalized, are part of an effort to manage the soaring expenses of artificial intelligence infrastructure and to adapt to organizational changes expected from AI tools.

Senior executives have informed leaders within the company to begin planning for potential staff reductions, the sources said, requesting anonymity due to the private nature of the talks. Meta declined to comment.

A cut of that scale would mark the company's most significant workforce reduction since its "year of efficiency" in 2022 and 2023. Meta reported having nearly 79,000 employees at the end of last year.

The move comes as CEO Mark Zuckerberg has aggressively redirected the company toward generative AI, a costly endeavor involving competitive hiring and massive capital investment. The company has previously stated plans to spend heavily on data center construction to support its AI ambitions.

In a call earlier this year, Zuckerberg hinted at the efficiency driving these shifts, noting he was beginning to see projects that once required large teams being handled by significantly fewer people.

This pattern is emerging across the tech sector. Companies like Amazon and Block have recently announced substantial layoffs, with executives citing AI's evolving role as a factor in operating with leaner teams.

Meta's push follows challenges in its AI research division last year, including the shelving of a highly anticipated large language model. The team is now focused on developing a new model to improve the company's competitive position, though internal assessments suggest its progress has been slower than hoped.

Source: The Guardian