Meta is laying off hundreds of employees across recruiting, social media, sales, and its Reality Labs division that makes smart glasses and VR headsets. The cuts come as the company pours billions into artificial intelligence development.
This isn’t Meta’s first round of layoffs. The company has cut over 20,000 jobs since late 2022 as CEO Mark Zuckerberg declared 2023 the “year of efficiency.” But while Meta trims staff, it’s spending enormous amounts on AI infrastructure and talent.
The AI Gold Rush Gets Expensive
Meta spent $28 billion on research and development in 2023 alone, much of it going toward AI projects. The company is racing against Google, Microsoft, and OpenAI to build the next breakthrough in artificial intelligence. This means buying thousands of powerful computer chips, hiring top AI researchers, and building massive data centers.
The Reality Labs division getting hit by layoffs has lost over $40 billion since 2021 on Zuckerberg’s metaverse bet. Meanwhile, Meta’s AI chatbot and smart glasses partnerships with Ray-Ban show more promise with users.
Meta says the layoffs help them move resources toward their biggest priorities. Translation: they’re cutting costs in some areas to fund their expensive AI ambitions. Other tech giants like Amazon and Google have made similar moves.
What’s Next
Expect more tech companies to make tough choices between traditional jobs and AI investments. Meta’s stock has surged as investors bet on their AI strategy, but employees in non-AI roles face an uncertain future. The company says affected workers will get severance packages and job placement help.