Meta says it doesn't know its ideal size as it prepares to lay off 10% of its entire staff

As employees at Meta prepare for significant layoffs next month, the pressing question looms: How many employees does the company truly require in an era dominated by artificial intelligence? During a recent earnings call, CFO Susan Li revealed her uncertainty about the ideal workforce size, stating, "I think there's a lot of change right now, with AI capabilities advancing rapidly." This uncertainty is not limited to Meta; it reflects a broader anxiety within the tech industry as companies grapple with the implications of AI. Meta is set to reduce its workforce by 10% on May 20, a move that has stirred apprehension among its employees. Although CEO Mark Zuckerberg did not directly address the layoffs during the call, he pushed back against the narrative that AI will lead to widespread job loss. "AI isn't going to replace people," he asserted, adding that it will enhance human capabilities and productivity. Zuckerberg emphasized that Meta is focusing on streamlining teams to ensure they are not larger than necessary, aligning with his vision of smaller, agile groups. He noted that advancements in AI are enabling small teams to accomplish tasks that once required extensive manpower, stating, "We're seeing one or two individuals create something in a week that previously took dozens months to complete." Li connected the upcoming layoffs to Meta's significant investment in AI infrastructure, which has seen annual capital expenditures double to between $125 billion and $145 billion, far surpassing revenue growth. Following this announcement, Meta's stock experienced a 6% decline. "As we grow our infrastructure spend, we remain committed to operating efficiently," Li explained, reiterating the plan to downsize the employee base in May. The pressure to reduce workforce sizes amid the rapid expansion of AI capabilities is mounting across the industry. Earlier this year, fintech company Block announced a staggering 40% reduction in its workforce, explicitly citing advancements in AI as the reason. Moreover, Microsoft recently offered voluntary buyouts to long-serving employees. Internally, Meta has aggressively embraced AI, launching initiatives like "AI Weeks," designating certain employees as "AI builders," and restructuring teams into specialized "AI pods."