Meta Stock Jumps 3% on Report of 20% Layoff to Fund AI
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- Meta stock climbed roughly 3% in premarket trading Monday after Reuters reported executives told senior leaders to plan workforce cuts exceeding 20%, which a Meta spokesperson called "speculative" and about "theoretical approaches."
- Meta employed nearly 79,000 people as of December 2025, so a 20% cut could affect more than 15,000 workers — surpassing the 11,000 jobs CEO Mark Zuckerberg cut in late 2022.
- Meta's 2026 AI capital expenditure is projected at $115–$135 billion, roughly double its 2025 AI spending, as part of a combined $700 billion AI investment by tech hyperscalers including Amazon, Alphabet, and Microsoft.
- Block said it's laying off 4,000 employees in February, Amazon cut 16,000 roles in January, and Atlassian announced a 10% reduction (1,600 jobs) — all tied to AI strategies.
- AI has been cited in over 12,000 U.S. job cuts so far in 2026, according to Challenger Gray & Christmas data.
- Jefferies analysts said Meta's potential cuts alongside rising AI capex "signals a broader shift" toward AI-driven productivity, with implications for the broader internet and software sector.
Why it matters: Meta's $115–$135 billion AI capex for 2026 is roughly double last year's spending, and a workforce reduction exceeding 20% would affect more than 15,000 employees — the largest since late 2022. Jefferies says this combination reframes the relationship between headcount, growth, and margins for the entire internet and software sector, where AI-linked layoffs have already hit Block, Amazon, and Atlassian in 2026.
