BofA sees Reuters report suggesting cost discipline at Meta

BofA notes that Reuters reported that Meta is considering a restructuring that could impact up to 20% of its workforce of about 79,000 employees, suggesting that the layoffs are aimed at offsetting rising AI related infrastructure expenses as part of a broader strategy to streamline operations and rely more on AI-driven productivity tools. The firm, which thinks the report underscores both the higher costs of AI infrastructure, but also cost benefits to R&D heavy companies from coding and other efficiencies, estimates a potential restructuring could yield about $7-$8B in annualized savings under “conservative” assumptions. Based on cost commentary in the article, the firm does not expect Meta to materially lower its FY26 expense guidance, but views the report as suggesting cost discipline at Meta, though it acknowledges that the “bear case” would be that the cuts are needed to ensure Meta’s outlook for operating income growth in 2026. The firm keeps a Buy rating and $885 price target on Meta shares.