Social media giant Meta Platforms (META) is planning to cut about 10% of its workforce, roughly 8,000 employees, as it looks to improve efficiency and offset the rising costs of artificial intelligence. According to Bloomberg, the company shared the news in a memo to staff, which confirmed that the layoffs will take place on May 20. In addition, Meta will no longer fill around 6,000 open positions it had previously planned to hire for. Notably, these cuts are happening as CEO Mark Zuckerberg continues to invest heavily in AI.
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Indeed, the company has been spending aggressively on both the talent and infrastructure needed to build advanced AI tools, such as large language models and chatbots. It has also announced several multibillion-dollar partnerships in recent months. At the same time, employees have been encouraged to use AI tools internally to help with tasks like writing code, which highlights just how important AI has become to Meta’s strategy.
However, the layoffs have created uncertainty for employees, especially since job cuts had already affected teams like Reality Labs earlier this year. According to the company, affected workers will receive severance packages that include base pay, extended healthcare coverage, and career support. Meanwhile, other tech companies are taking similar steps, with Microsoft (MSFT) also offering buyouts as AI spending rises.
What Is the Price Target for Meta?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $855.60 per share implies 30% upside potential.
