Meta Platforms (META), the social media and tech giant behind Facebook, Instagram, and WhatsApp, is cutting about 8,000 jobs worldwide as it shifts more money and staff toward AI.
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The company began telling workers on Wednesday, with staff in Asia getting the first notices. U.S. staff were also set to hear regarding their own fate during their morning. As part of the process, Meta told staff to work from home while the cuts move ahead.
The layoffs are set to hit product and engineering teams in a big way. At the same time, Meta has moved about 7,000 workers into new AI teams focused on products and agents.
Meanwhile, META shares dropped 1.41% on Tuesday, closing at $602.61.
Meta Wants Smaller Teams
Meta says the goal is to run with leaner teams that can move faster. In a memo seen by Bloomberg, Head of People Janelle Gale said, “We’re now at the stage where many orgs can operate with a flatter structure with smaller teams of pods/cohorts that can move faster and with more ownership.”
The move fits with Chief Executive Officer Mark Zuckerberg’s push to make AI the main focus at Meta. The company is racing to keep up with Alphabet Inc. (GOOGL), OpenAI, and other AI leaders. It has also urged staff to use AI tools for coding and other tasks.
However, the shift has raised stress inside the company. Some workers are worried about more layoffs, while others have pushed back on plans to collect staff device data to help train AI tools.
From a market perspective, the key issue is cost. Meta is spending huge sums on AI, with planned capital spending well above $100 billion this year. Some reports even suggest that spending may reach $145 billion. By contrast, Evercore analysts estimate the job cuts may save about $3 billion. That means the cuts may help at the margin, but they will not come close to covering Meta’s full AI bill.
Is Meta Stock a Buy or Sell Right Now?
Turning to the Street, Meta Platforms has a Strong Buy consensus. Of the 34 analysts’ ratings, 30 rate the stock a Buy, while four rate it a Hold. The average META stock price target is $829.97, implying a 37.73% upside from the current price.
