Meta to cut 8,000 jobs as AI spending push reaches $145bn

Meta will cut roughly 8,000 jobs this month, or about 10 per cent of its workforce, as the company directs a record $125bn to $145bn into artificial intelligence infrastructure in 2026, executives confirmed on the Q1 earnings call.

The layoffs, disclosed by chief executive Mark Zuckerberg and chief financial officer Susan Li, come even as Meta reported revenue of $56.3bn for the first quarter, a 33 per cent increase from the prior year, with an operating margin of 41 per cent. The company ended the quarter with 77,900 employees, down 1 per cent from the previous period.

Zuckerberg framed the cuts as part of a structural shift in how Meta builds technology. He said the company is seeing more examples where one or two engineers using AI tools can build in a week what previously took dozens of people months. He added that people will be more important in the future, not less, though employees received the message alongside confirmation of the May layoffs.

Li was more direct about the arithmetic. Speaking to analysts, she said Meta would reduce the size of its employee base and argued a leaner operating model lets the company move more quickly while also helping to offset the substantial investments it is making in AI compute, data centres, and custom silicon.

The maths of the pivot

The capital commitment far exceeds what Meta could save by cutting staff. The company’s total annual employee compensation bill runs to roughly $27bn. The 2026 capex guidance of $125bn to $145bn is four to five times that figure. Even eliminating every payroll dollar would not close the gap.

Meta added $107bn in contractual commitments during the first quarter alone, mostly for cloud and infrastructure deals. It raised the full-year capex guidance citing higher component prices and the rising cost of data centres, a signal the build-out is accelerating.

An industry-wide shift

The Meta cuts are part of a wider reallocation of capital across the technology sector. In April 2026 alone, US companies announced 83,387 job cuts, with 21,490 of those explicitly attributed to artificial intelligence, according to data compiled by Challenger, Gray and Christmas. The four largest hyperscalers are on track to spend a combined $725bn on capital projects this year, a 77 per cent increase from 2025.

Amazon has cut roughly 30,000 roles over the past five months while its quarterly capex hit $44.2bn. Microsoft added $250bn in commitments tied to OpenAI and Azure infrastructure. Alphabet guided to $180bn to $190bn in 2026 capital spending and said 2027 would be significantly higher.

That spending has already lifted equity markets. The S&P 500 has reached record territory on AI-driven valuations even as earnings growth lags the multiple expansion.

Meta has not published a breakdown of which roles or regions will be affected by the May cuts, and the company declined further public comment beyond the earnings call. The stock has fallen roughly 6 per cent since the start of the year as investors weigh the returns on a capital spending cycle that continues to accelerate.