"Due to AI Investment Costs"... Meta Officially Announces 10% Workforce Reduction in May

Mark Zuckerberg, CEO of Meta, is arriving through the Seoul Gimpo Business Aviation Center in Gangseo-gu, Seoul in 2024. Photo by Hyunmin Kim kimhyun81@

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Meta, the operator of Facebook and Instagram, has officially announced that it will lay off about 10% of its entire workforce next month in order to offset massive investment costs related to artificial intelligence (AI).

According to Bloomberg on the 23rd (local time), Meta informed employees via a memo that layoffs will take place on May 20. The number of layoffs will reach around 8,000, and Meta has also canceled plans for 6,000 new hires that were originally scheduled.

Bloomberg reported that Janelle Gale, Chief Human Resources Officer at Meta, stated in an internal memo, "This is part of our ongoing efforts to operate the company more efficiently and to offset other investment costs."

Gale added, "We know this news is unwelcome and that confirming it makes everyone anxious, but given the current situation, we believe this is the best course of action," and continued, "We are still finalizing the details, so it will be difficult to share more specifics until the end of May."

According to the internal memo, the severance package will consist of 16 weeks of base salary plus an additional two weeks of pay for each year of service. In addition, Meta will provide 18 months of health insurance coverage for employees and their families, as well as job placement services and immigration support.

This round of layoffs comes as CEO Mark Zuckerberg is aggressively investing in talent and infrastructure needed for the development of cutting-edge AI products, including large language models and chatbots.

Meta is expecting record-high capital expenditures this year. As part of this, the company has announced several multi-billion dollar contracts with AI partners over the past few months.

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Other major technology companies are also undergoing restructuring due to large-scale investments in AI. Microsoft has reportedly offered thousands of its U.S. employees the option of voluntary early retirement.

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