More Big Tech Layoffs Loom as Meta Mulls 20% Cut to Its Workforce

Key Takeaways

• Meta Platforms is considering laying off 20% or more of the company's workers, Reuters reported.
• A number of companies across the tech sector have turned to layoffs as a way to manage costs as they boost spending on AI.

Another massive round of layoffs could be coming for employees at Meta Platforms (META).

The social media giant is considering cutting 20% or more of its workforce as it looks to offset its hefty investments in AI and prepare for improvements in efficiency from advances with the technology, Reuters reported over the weekend. In its latest annual filing, Meta said it had just under 79,000 employees at the end of 2025.

Meta did not respond to an Investopedia request for comment in time for publication.

Why This Is Significant

Meta's moves speak to a broader trend as several tech companies have announced large layoffs in recent months. Analysts have suggested some firms could still be correcting for overhiring during the pandemic. Many firms are also looking for ways to cut costs to support growing investments in AI, and may be anticipating they could need fewer workers thanks to the technology.

Meta said in its January earnings report that it expects to spend $115 billion to $135 billion in capital expenditures this year as it ramps up its AI data center buildout. JPMorgan analysts said they estimate a 20% layoff would save Meta about $5 billion to $6 billion, and that the savings could help boost 2027 earnings in the face of rising costs.

"If Meta is willing to reduce headcount at this scale while ramping AI investment, we think it signals a broader shift," Jefferies analysts said, noting that other tech firms could make similar moves, adding to a spate of layoffs in the industry.

Meta has already made cuts in recent months to several divisions within the company, including its AI team and metaverse group, the virtual reality project CEO Mark Zuckerberg once hailed as the future of the company.

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Meta shares were up about 3% in recent trading, as the tech giant also announced a deal to buy between $12 billion and $27 billion in cloud computing capacity from AI infrastructure firm Nebius Group (NBIS). Despite Monday's gains, Meta shares are down about 5% since the start of the year.

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