Report: Meta Plans ‘Sweeping Layoffs’ as AI Woes Mount

Mark Zuckerberg’s company is considering drastic measures after a key product failed to live up to expectations. 

BY BEN SHERRY, STAFF REPORTER @BENLUCASSHERRY

Illustration: Inc.; Photos: Getty Images

Meta is considering “sweeping layoffs” that could see the company cut up to 20 percent or more of its workforce, according to Reuters. The social media conglomerate—whose subsidiaries include Facebook, Instagram, and WhatsApp—is reportedly looking to offset its growing AI expenses by shedding a significant number of employees, in part because the company believes that AI-assisted workers will bring “greater efficiency.” 

Reuters said that the magnitude of the cuts haven’t been finalized, and a date for when they’ll be announced hasn’t been set. 

The move comes just after Meta reportedly decided to delay the rollout of its latest AI model, codenamed “Avocado,” after it wasn’t able to match the performance of models from competitor OpenAI, Google, and Anthropic. According to the New York Times, Meta’s model underperformed across reasoning, coding, and writing. 

As a result, the Times reported, Meta has pushed back the launch of the Avocado model from this month to at least May. Meta’s leaders have reportedly discussed licensing Gemini, the family of AI models from Google, to temporarily power the social media company’s AI features. 

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The Times also reported that Meta executives are currently debating whether or not to release the new model as open or closed source. Meta has previously committed to open source models, allowing developers to view some of the code inside the models, download the models, and run them on their own hardware. Closed source models, on the other hand, can only be run through an API, meaning they can’t be downloaded or freely used. 

Meta has invested heavily to compete in the AI race. The company shelled out hundreds of millions to recruit top talent from across the industry, spent $14.3 billion to acquire a 49 percent stake in Scale AI and recruit founder Alexandr Wang to lead the company’s AI efforts, and last week acquired Moltbook, a social media site for AI agents. Today, Meta announced that it would spend up to $27 billion over a multi-year period for access to AI infrastructure from data center company Nebius. 

When the stock market opened this morning, Meta shares jumped by around 3 percent. Tech investors appear eager for large organizations to cut costs by slashing their workforce; when Block CEO Jack Dorsey announced plans to eliminate 4,000 employees, shares of the company rose by roughly 20 percent. Reuters reports that as of December 31 2025, Meta employed nearly 79,000 people. A 20 percent cut could eliminate roughly 15,800 employees. 

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