Mark Zuckerberg, the CEO of Meta, formerly known as Facebook, recently held a company town hall on April 30 to address Meta employees directly regarding the layoffs that were reported by Reuters in March. This was the first time he spoke to staff about the cuts, and his words did not provide much reassurance to the employees.
During the town hall, Zuckerberg explained the reason behind the layoffs, stating that the company has two major cost centers: compute infrastructure and people-oriented expenses. He emphasized that investing more in one area means less capital to allocate to the other, necessitating a reduction in the company’s size.
When asked about the possibility of more layoffs in the future, Zuckerberg did not provide a definitive answer, expressing uncertainty about the company’s future trajectory. He also addressed concerns about AI tools replacing human roles, stating that increased efficiency from using AI tools is not the primary driver of the layoffs.
Meta’s CFO, Susan Li, added to the employees’ unease by mentioning that the company does not yet know its optimal long-term size due to the rapid advancements in AI technology. While lower employee compensation costs are expected after the layoffs, restructuring costs will offset these savings in the short term.
The scale of the layoffs at Meta is substantial, with approximately 8,000 employees being cut in the May 20 round, representing about 10% of the global workforce. This adds to the 25,000 total cuts since 2022, affecting various divisions within the company.
The layoffs come at a time when Meta is posting record profits, with revenue reaching $201 billion in 2025 and Q1 2026 revenue exceeding Wall Street expectations. However, the company is increasing its capital expenditure to fund AI infrastructure and development, leading to the need for cost-cutting measures.
Internally, Meta employees have openly criticized the leadership over the layoffs, feeling blindsided by the sudden shift from growth to large-scale cuts. The combination of surveillance measures and job cuts has added to the internal unease among employees.
While the layoffs may raise concerns among employees about job security, investors see the potential for cost savings and improved margins from a leaner company focused on AI development. The stock price dropped in response to the earnings miss and capex hike but reflects the uncertainty surrounding Meta’s AI bet.
Overall, Meta’s future remains uncertain as the company navigates the challenges of balancing growth, cost-cutting measures, and AI investments. The employees and investors alike are grappling with the uncertainty of the company’s direction and the impact of these changes on its workforce and financial performance.
