Meta to lay off 10% of its staff: What we know
Meta to lay off 10% of its staff: What we know
Meta, the Menlo Park-based parent company of Facebook, Instagram, and WhatsApp, announced this week that it will reduce its workforce by about 10% as it shifts its focus toward artificial intelligence.
MENLO PARK, Calif. - Meta, the Menlo Park-based parent company of Facebook, Instagram, and WhatsApp, announced this week that it will reduce its workforce by about 10% as it shifts its focus toward artificial intelligence.
Thousands of jobs
By the numbers:
In a memo sent to employees, company executives confirmed the elimination of 8,000 jobs.
Additionally, the tech giant plans to leave 6,000 currently vacant positions unfilled.
The move is part of a broader strategy to make the company more efficient and, according to the memo, to "allow us to offset the other investments we're making."
AI ‘arms race’
What they're saying:
Industry analysts say those investments are centered almost entirely on an "AI arms race."
Tech companies, including Meta, have spent an estimated $700 billion on artificial intelligence this year, funding the development of new products, specialized infrastructure, and massive data centers.
In January, CEO Mark Zuckerberg told investors he planned to spend between $115 billion and $135 billion on AI at Meta this year alone.
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"AI uses a lot of electricity to be able to function. And it requires a lot of expensive micro processing chips. And the expense of that is continuing to increase," said Parag Amin, business analyst and attorney.
However, some experts question the long-term impact of trading human staff for technology.
"They have to get that money from somewhere. They can't keep borrowing it," said Marcus Mossberger, a workforce strategy expert. "They’ve taken it from payroll... which honestly, I think is a little bit short-sighted because I think they're going to need a lot of those people. That institutional knowledge, that intellectual capital, has a lot of value."
What's next:
Meta plans to notify impacted workers on May 20.
"Right now what we're seeing is a revamp of the white collar industry - particularly in tech - but we're seeing it across the board in professional industries that traditionally were unaffected by advances in technology," said Amin. "I believe companies such as Meta are looking at the real possibility of replacing a number of jobs with the AI that they're investing in. And that's a trend, unfortunately, that I think we'll continue to see to increase in the future."
To assist with the transition, the company stated it will provide outgoing employees with at least 16 weeks of severance pay.