Shares of Meta Platforms rose on Monday after reports that the technology giant may cut more than 20 per cent of its workforce as it increases investment in artificial intelligence.
The company’s stock climbed about three per cent following a report suggesting the layoffs could help offset rising spending on AI development and infrastructure. If implemented, the move would represent Meta’s largest job reduction since its major restructuring in 2022 and 2023, when the company eliminated about 21,000 positions during what it called its “year of efficiency.”
Meta has significantly increased spending in recent years to compete with leading artificial intelligence developers such as OpenAI, Anthropic and Google. The company has been investing heavily in data centres, cloud infrastructure and top AI talent.
The company expects capital expenditures to reach as much as $135 billion in 2026, nearly double its spending from the previous year. A large portion of that investment is intended to support the computing power required to train and run advanced AI models.
Meta recently signed a deal valued at up to $27 billion with cloud provider Nebius to secure additional capacity for AI systems.
Despite the heavy investment, Meta has not yet introduced an artificial intelligence model capable of matching the performance of leading systems from its competitors. The company has been developing a new AI model known as “Avocado,” but early results have reportedly fallen short of expectations.
Analysts say a 20 per cent reduction in staff could produce significant financial benefits. According to estimates from Rosenblatt Securities, such cuts could save roughly $6 billion annually and increase Meta’s adjusted core earnings by about five per cent.
Meta’s workforce stood at approximately 79,000 employees at the end of December. In response to reports about potential layoffs, the company described the information as speculative and said it referred to theoretical scenarios.
The possible cuts come as technology companies around the world increasingly link job reductions to the rise of artificial intelligence. Industry data shows more than 61,000 layoffs tied to AI-related restructuring have been announced globally since late last year.
Major companies including Amazon and Australia-based logistics software firm WiseTech Global have also announced workforce reductions connected to automation and AI-driven productivity changes.
Some analysts, however, argue that the recent wave of layoffs may partly reflect companies correcting earlier hiring surges rather than artificial intelligence alone. Others say AI is increasingly reshaping how technology firms operate, potentially reducing the need for certain roles while increasing demand for specialized technical talent.