Meta and Microsoft Slash Workforce Amid AI Spending Surge

IT giants, Meta Platforms and Microsoft, have both decided to cut their workforces. The companies said the mounting costs of their AI ambitions were the main reason for job cuts.

Meta is to lay off around 8,000 employees, 10% of its total headcount, and has cancelled plans to fill 6,000 open roles. Chief People Officer Janelle Gale explained that the company was fleshing out details earlier than it hoped. US staff are to receive at least 16 weeks of basic pay plus two weeks for every year of service, along with 18 months of health coverage.

Meta is expanding AI investment, building large-scale data centers, and exploring in-house chip development. It cut several hundred jobs in March as part of a restructuring effort, which affected teams across sales, recruitment, and its Reality Labs hardware division. Microsoft is looking to shed 7% of its domestic staff through voluntary redundancy. Around 8,750 people out of 125,000 would be deemed eligible.

Both companies are spending heavily on data centers and AI infrastructure. Meta is pumping huge sums into its AI efforts as it pursues superintelligence goals. Microsoft is building AI data centers and cloud infrastructure globally, with investment announcements in Norway and Singapore this month.