Meta slashes 8,000 roles and lifts 2026 spending capex to $145bn as AI strategy accelerates

Meta has confirmed plans to reduce its global workforce by approximately 8,000 roles, representing roughly 10 per cent of its staff, following an announcement by CEO Mark Zuckerberg at a company town hall on 30 April. The restructuring also involves eliminating about 6,000 open positions before they are filled. These decisions mark a significant shift in the company's approach, driven by a strategic pivot to fund aggressive capital expenditure for artificial intelligence infrastructure and model development.

The rationale behind the cuts was explained by Zuckerberg, who stated that the company operates with two major cost centres: compute infrastructure and people-oriented activities. He noted that increased investment in one area necessitates a reduction in the other to allocate capital effectively. This strategy aligns with a substantial revision to the company's financial outlook, with the 2026 capital expenditure forecast raised to between $125 billion and $145 billion, up from the previous range of $115 billion to $135 billion.

Chief Financial Officer Susan Li addressed the implications for the workforce during the town hall, confirming that Meta does not yet know its optimal long-term employee count given the rapid pace of AI advancement. While the restructuring is expected to generate annualised savings of $7 billion to $8 billion, as estimated by Bank of America, these financial benefits are not anticipated until later in the year. Li acknowledged that lower compensation costs resulting from the layoffs would be offset this year by the restructuring costs associated with the cuts themselves.

The announcement comes against a backdrop of strong financial performance, with Meta reporting 2025 revenue of $201 billion, a 22 per cent increase year-on-year, and free cash flow for the period reaching $43.6 billion. Despite these robust figures, the stock price dropped nearly 9 per cent on 30 April, reflecting investor reaction to the earnings miss, the hike in capital expenditure, and the workforce reductions. The cuts are part of a broader trend, with total reductions since 2022 now standing at roughly 25,000 employees across divisions including Reality Labs, social media, and global operations.

Internal reaction to the news has been mixed, with some backlash emerging on Meta's message forum regarding the combination of layoffs and a new employee monitoring initiative tracking mouse movements and keystrokes. The uncertainty surrounding future staffing levels has also been highlighted by Zuckerberg, who declined to offer a crystal ball plan for the next three years, stating that no one possesses such certainty regarding how AI trends will play out. Additional workforce reductions are planned for the second half of 2026, though the specific timing and scope remain unfinalised.

For investors, the move represents a high-stakes bet on AI infrastructure, with the increased spending directed toward Superintelligence Labs under Chief AI Officer Alexandr Wang. While the immediate impact includes a leaner balance sheet and projected cost savings, the company is proceeding without a definitive long-term headcount, acknowledging that the optimal workforce size remains unknown in the face of such rapid technological change.