Meta Platforms Will Close 6,000 Open Positions in Addition to Major Layoffs as META Stock Investors Worry That AI Spend Is Just Too Much

Meta Platforms (META) has made it clear behind closed doors that it will tighten the screws next month. The social network operator has confirmed plans to cut jobs while shutting the door on 6,000 open roles to sharpen efficiency and make room for its swelling artificial intelligence (AI) spend, with layoffs expected in the final weeks of May and more reductions likely later in the year.

Chief people officer Janelle Gale laid out the plan plainly, stating that Meta will let go of 8,000 employees while keeping 6,000 vacancies unfilled. She explained that the company aims to run a tighter ship and offset rising investment commitments, while also admitting that leaks forced an early disclosure.

The decision marks Meta’s most significant workforce reduction since late 2022 and early 2023, when it cut around 21,000 jobs during its so-called “year of efficiency.” The history now seems to repeat itself with a sharper edge as the company doubles down on discipline while chasing a far more capital-intensive future.

At the same time, Meta has outlined plans to invest up to $135 billion in Meta Superintelligence Labs and broader AI infrastructure, effectively doubling its capital expenditure from 2025. The scale of spending places AI at the center of its future, but it also raises the bar for execution, as every dollar now carries higher expectations.

What started in a Harvard dorm as Facebook has become the backbone of modern online interaction, spanning Instagram, WhatsApp, and Messenger across billions of users. The Menlo Park, California-based giant has tightened its grip through sharp acquisitions and fast-follow feature rollouts that kept rivals in check.

Now, armed with a market cap of roughly $1.7 trillion, Meta is pouring capital into AI, smart glasses, and virtual reality, aiming to redefine computing as something ambient, immersive, and constantly within reach.

The stock’s story does have a few plot twists, though. META stock climbed 26.6% over the past year, stumbled 8.58% in the last six months, and has now bounced back 13.85% in just the last month. Investors clearly flinched at the spending spree, but they did not stay away for long once growth momentum reappeared.

From a valuation standpoint, META stock is trading at 21.83 times forward adjusted earnings, rich compared to peers, yet still below its own five-year average, suggesting a favorable entry point for long-term investors.

On the income front, Meta pays an annual dividend of $2.10 per share, yielding 0.32%. Its most recent quarterly dividend of $0.53 per share was paid on March 26 to shareholders of record as of March 16.

On Jan. 28, Meta walked into the Q4 fiscal year 2025 earnings results that exceeded Wall Street expectations, watching its stock pop 10.4% the very next trading session. Meta generated $59.9 billion in revenue, marking 23.8% year-over-year (YOY) growth and surpassing the $58.45 billion analyst estimate.

Strong advertiser demand supported this performance, while AI-driven ad targeting improved campaign precision. At the same time, higher engagement across Meta’s platforms strengthened monetization and sustained top line expansion. The company delivered EPS of $8.88, representing 10.7% growth from the prior year and exceeding the $8.22 forecast.

Expenses rose 40.5% to $35.1 billion, reflecting increased investment in infrastructure and talent. Despite this, income from operations reached $24.7 billion, rising 5.9%, while net income increased 9.3% to $22.8 billion. Free cash flow rose 7% from the prior year’s period to $14.1 billion, indicating that Meta continued to generate strong cash even as it expanded aggressively.

Meta ended the quarter with over 78,800 employees, up 6% YOY, driven by hiring in areas of monetization, infrastructure, Meta Superintelligence Labs, and compliance. Capital expenditures totaled $22.1 billion, supporting data centers, servers, and network infrastructure. The company held $81.6 billion in cash and marketable securities against $58.7 billion in debt.

Looking ahead, Meta expects Q1 fiscal year 2026 revenue between $53.5 billion and $56.5 billion. For 2026, it projects expenses of $162 billion to $169 billion and capital expenditures of $115 billion to $135 billion, driven by AI investments. And, management expects operating income to exceed 2025 levels despite higher spending.

The company is scheduled to release its Q1 fiscal year 2026 financial results after market close on Wednesday, April 29. Analysts expect the quarter’s EPS to increase 4.4% YOY to $6.71. For full-year fiscal 2026, they project marginal growth to $29.83, followed by a 14.7% rise to $34.20 in fiscal year 2027.

Meta is drawing significant backing from institutional analysts, who see its AI roadmap translating directly into earnings momentum. UBS has raised its price target to $908 from $872 and maintains a “Buy” rating, signaling conviction that Meta’s investments would drive measurable financial upside.

Meanwhile, Citizens Financial Group analyst Andrew Boone reiterated a “Market Outperform” rating, attaching a $900 price target. Boone’s stance reflects confidence that Meta’s AI-enhanced engagement and advertising performance would continue to unlock upside.

Wall Street has currently assigned the META stock an overall “Strong Buy” rating. Among 56 analysts, 45 rate it a “Strong Buy,” three have assigned a “Moderate Buy,” and eight recommend “Hold.”

To that end, the average price target of $853.87 implies potential upside of 26.5%. Meanwhile, the Street-high target of $1,015 points to a possible gain of 50.4% from current levels.

On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com