Meta plans to cut about 8,000 employees, roughly 10% of its workforce, according to AP and The Guardian. The company also will not fill 6,000 roles that were in the hiring pipeline. The layoffs are set to begin May 20.
Microsoft has prepared a voluntary departure program for about 8,750 U.S. employees. AP, citing sources, reported the company plans to make the offer in early May to about 7% of its U.S. workforce. The Guardian said a voluntary program of that size in the United States is unusual for Microsoft.
The staffing moves come as both companies expand AI investment. Meta has warned investors that total costs this year could rise to $162 billion to $169 billion as spending increases for AI infrastructure and recruiting highly paid AI specialists. AP reported that Meta is cutting jobs in the name of efficiency while ramping up AI infrastructure investment and AI hiring.
In an internal memo, Meta did not cite AI as a direct reason for the layoffs, but the goal of easing cost pressure was clear. The Guardian reported that Meta Chief People Officer Janelle Gale said the move is intended to offset other investment costs. Meta CEO Mark Zuckerberg previously said some projects no longer require large teams because outstanding individuals can use AI to handle the work.
Microsoft faces similar pressure as it pours money into cloud and AI data centers and AI services such as Copilot. The Guardian reported Microsoft is expected to spend $100 billion on AI infrastructure in the next fiscal year, while analysts estimate actual spending could reach $110 billion to $120 billion.
Workforce reductions are spreading across the tech sector. Reuters reported Amazon has been preparing additional cuts as it targets reducing about 30,000 office jobs. Block said it will cut more than 4,000 employees, about 40% of its workforce, as part of a restructuring to embed AI tools across company operations.
The AI investment race is reshaping Big Tech’s fixed costs. Where labor and server operations once dominated, companies now face rising costs for AI chips, data centers, power and compensation for AI research staff. If revenue growth does not keep pace, pressure increases to offset costs through job cuts.
The impact is extending to office and software development roles. Microsoft CEO Satya Nadella has said 20% to 30% of the company’s internal code was being written by AI last year. The Guardian reported growing concern among Big Tech employees that AI could replace jobs.
Restructuring tied to the AI shift is likely to continue for now, though the reasons cannot be reduced to AI-driven replacement alone. Gartner Senior Director Analyst Kathy Ross said, “AI-driven layoffs are getting attention, but the reality is more complex,” adding that as companies confront AI’s limits and higher customer expectations, they may need to invest in staffing again to maintain service quality and growth.
* This article has been translated by AI.
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