Mark Zuckerberg’s Meta is cutting thousands of jobs to “offset” the cost of its multibillion-dollar spending spree on artificial intelligence (AI).
Meta, which owns Facebook, WhatsApp and Instagram, announced plans on Thursday to cut 10pc of staff to help fund heavy investments into AI technologies.
The redundancies will see Mark Zuckerberg’s tech company axe around 8,000 employees next month. Meta is also scrapping plans to hire around 6,000 new staff.
In a memo sent to Meta staff and seen by Bloomberg, executives said: “We’re doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making.”
Meta has warned investors that it could spend up to $169bn this year as it strives to catch up with rivals such as OpenAI and Google in the cut-throat Silicon Valley AI arms race.
It is spending heavily on data centres and AI infrastructure, while Mr Zuckerberg has also offered $100m signing bonuses and multi-year deals worth a reported $1bn in a bid to lure AI talent to Meta.
The plans follow a series of smaller rounds of lay-offs at Meta in recent months, including at its Reality Labs division where 10pc of staff were cut, equivalent to around 700 jobs. That reflected Mr Zuckerberg’s unsuccessful bet on the metaverse as the future of the company several years ago.
Analysts said Meta could cut even more jobs later this year as it uses AI tools to automate much of the work currently carried out by employees.
Dan Ives at Wedbush said Meta was likely to use “AI tools to automate tasks that once required large teams, allowing the company to streamline operations and reduce costs while maintaining productivity.”
Meta’s plans come amid widespread lay-offs throughout the tech industry as executives funnel money towards AI tools they hope can help people work more efficiently and reduce the need for large workforces.
On Thursday, Microsoft said it was offering voluntary redundancy to thousands of its US employees for the first time in its history.
The software giant plans to make the offers in early May to about 8,750 people, or 7pc of its US workforce.
Microsoft’s chief people officer, Amy Coleman, announced the voluntary retirement plan in a memo to staff seen by CNBC.
“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” it said.
While it made no mention of AI, the unusual early retirement scheme comes as Microsoft also ploughs billions of dollars into the technology. The company is a key partner and investor in ChatGPT-developer OpenAI.
