Meta Platforms Inc. (NASDAQ:META) CEO Mark Zuckerberg told employees on Thursday that the company's aggressive artificial intelligence spending is directly contributing to planned layoffs.
Meta's AI Investment Reshapes Workforce Priorities
During a company town hall, Zuckerberg said Meta's expanding AI infrastructure budget is forcing difficult financial trade-offs between funding advanced compute systems and maintaining headcount, Reuters reported.
Zuckerberg explained that Meta's two primary expenses are infrastructure and personnel and increasing spending in one area means reducing available resources in another.
As the company accelerates investments in AI, he said it needs to "take down" workforce size to balance those costs.
Meta is expected to cut roughly 10% of its workforce beginning May 20, with additional layoffs reportedly coming later this year.
More Layoffs Remain Possible
While confirming the current round of cuts, Zuckerberg declined to provide long-term certainty about future staffing levels.
The Meta CEO said he did not have a "crystal ball" for how the company's evolving AI transformation will unfold over the next several years.
"I wish that I can tell you that I have a crystal ball plan for the next, like, three years of how all this stuff is going to play out. I don’t. I don’t think anyone does," he stated.
Employee Backlash Grows Amid AI Push
The layoffs, combined with Meta's broader shift toward an "AI native" structure and internal productivity tracking initiatives, have reportedly sparked internal criticism from employees.
Zuckerberg insisted that AI efficiency tools alone are not currently driving layoffs.
In a statement to Benzinga, Meta referred to Wednesday's earnings call, during which CFO Susan Li said the company does not yet know what its "optimal" long-term size will be, given the pace of AI advancements.
"We do expect lower going forward employee compensation expense versus what we would have expected last quarter, given the planned workforce reduction, but that is offset within this year by restructuring costs that we expect to incur as part of the layoffs," Li added.
Meta Beats Q1 Estimates, Raises AI Capital Spending Outlook
Meta reported first-quarter revenue of $56.31 billion, surpassing Wall Street expectations of $55.45 billion, while adjusted earnings came in at $7.31 per share, ahead of analyst estimates of $6.78 per share.
For the second quarter, Meta projected revenue between $58 billion and $61 billion, compared with consensus forecasts of $59.50 billion.
The company maintained its full-year 2026 expense outlook of $162 billion to $169 billion but raised its capital expenditure forecast to between $125 billion and $145 billion, up from its previous guidance of $115 billion to $135 billion.
Price Action: META shares closed Thursday at $611.91, down 8.55% and edged up 0.26% to $613.51 in after-hours trading, according to Benzinga Pro.
According to Benzinga Edge Rankings, Meta ranks in the 88th percentile for Quality. It shows a negative price trend across its short, medium and long-term performance.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Frederic Legrand – COMEO / Shutterstock.com
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