Meta announces massive layoffs, 20% workforce likely to be affected amid rising AI costs. All you need to know

Meta, the tech powerhouse led by Mark Zuckerberg, is bracing for substantial layoffs that could affect about 20% of its workforce, equivalent to around 16,000 employees from its total of 79,000. This drastic measure comes in response to escalating costs associated with artificial intelligence (AI), which are anticipated to soar to approximately $600 billion for data centers by 2028, prompting a shift towards an AI-centric operational model. The layoffs are expected to predominantly impact divisions such as Reality Labs, along with other legacy teams that do not prioritize AI initiatives. Reality Labs has been under scrutiny for its financial performance, facing significant operational losses. As Meta pivots from ambitious projects like fully immersive VR headsets and Metaverse ventures, it is increasingly focusing on AI-driven wearable technology. During a recent earnings call, Zuckerberg highlighted how AI tools empower individual talented employees to handle projects that once required extensive teams, leading to a natural reduction in workforce across various sectors. The restructuring will also affect middle management as Meta seeks to eliminate excess layers to enhance decision-making efficiency, aligning with its 'Year of Efficiency' strategy. In addition to job losses in management, the company is refining its AI divisions. Instead of maintaining broad research teams, Meta plans to concentrate on high-impact AI models, such as Avocado and Mango. Moreover, teams responsible for routine administrative and operational functions are likely to be downsized due to the increased use of AI to improve internal processes. Currently, there is no confirmed timeline for the impending layoffs. While internal discussions are taking place, Meta has characterized media reports regarding the job cuts as speculative.