Meta to Cut 10% of Staff; AI Capex to Hit $135B, China Bans US Investment
Meta will cut roughly 8,000 jobs (10% of staff) next month as it invests heavily in AI, with capex projected between $115 billion and $135 billion. High-profile engineer defections to Thinking Machines and China’s ban on US investment in domestic tech over Meta’s $2 billion Manus acquisition add regulatory risks.
1. Meta Announces Workforce Reduction
Meta confirmed plans to cut approximately 8,000 employees, representing about 10% of its global workforce, next month. The move aims to streamline operations and improve margins as the company reallocates resources toward strategic AI initiatives.
2. Ramp-Up in AI Investment
The company forecasts capital expenditures of $115 billion to $135 billion in 2026, the bulk of which will fund new AI data centers and infrastructure. This significant capex increase underscores Meta’s commitment to maintaining leadership in artificial intelligence development.
3. Talent Exodus and Geopolitical Headwinds
Several long-tenured Meta engineers, including experts in multimodal perception and open-world segmentation, have joined AI startup Thinking Machines following its multibillion-dollar cloud deal with Google and Nvidia. Meanwhile, China’s new directive barring domestic tech firms from US-origin investment—triggered by Meta’s $2 billion Manus acquisition—raises further regulatory uncertainty for the company.