Meta Eyes 20% Workforce Reduction to Fuel $135B AI Push
Meta Platforms is considering cutting over 20% of its 79,000 employees—the largest reduction since its 2022-23 restructuring—to generate about $6 billion in annual savings as it doubles AI infrastructure spending. Capital expenditures could reach $135 billion in 2026, including a $27 billion multi-year deal with Nebius for AI compute capacity.
1. Potential Workforce Reduction
Meta is reviewing plans to cut over 20% of its roughly 79,000‐strong workforce, marking its largest headcount reduction since 2022-23. The move is projected to yield about $6 billion in annual cost savings to offset rising AI development and infrastructure expenses.
2. AI Infrastructure Deal
The company has committed up to $27 billion for a multi-year agreement with Nebius, securing dedicated AI compute capacity beginning in early 2027. This deal includes $12 billion in initial resources and an option for up to $15 billion more services based on demand.
3. Capital Expenditure Outlook
Meta’s capital spending is set to nearly double, with forecasts of $135 billion in 2026 to support data centers and AI training infrastructure. This ramp-up underscores the company’s push to strengthen its position in the global AI market.
4. Avocado Model Challenges
Despite heavy investment, Meta has not yet launched an AI model that competes directly with offerings from peers. Its in-development Avocado model has reportedly failed to meet internal performance benchmarks, raising questions about short-term AI roadmap execution.