Meta’s layoffs starting this week highlight the reality of Zuckerberg’s AI

when meta CEO Mark Zuckerberg told employees of his plans to lay off 11,000 employees at the end of 2022, saying the cuts would later be expanded to 21,000, and acknowledged that he had overhired during the coronavirus pandemic.

“I made a mistake, and I take responsibility for it,” Zuckerberg said in a message to employees in November, when the company’s stock was plummeting. Mr. Zuckerberg said in early 2023 that job cuts were necessary as part of Meta’s “year of efficiency.”

More than three years later, with the latest wave of layoffs set to begin this week, the tone at the top has changed dramatically. Meta will reduce its workforce by about 10%, or about 8,000 people, starting Wednesday. The company also scrapped plans to fill 6,000 open positions, according to an April layoff memo.

The layoffs follow the company’s Reality Labs division in January, which cut approximately 1,000 staff members, and the company’s March decision to reduce its workforce by affecting hundreds more employees and shift content moderation duties away from third-party vendors and contractors.

Meanwhile, Meta is ramping up its investment in artificial intelligence, and last month raised its 2026 capital spending outlook by up to $10 billion, to a maximum of $145 billion.

In announcing the upcoming layoffs, a week before revealing increased capital spending, Mr. Mehta told employees that the layoffs were “all part of our continued efforts to run the company more efficiently and to be able to offset other investments we’re making.”

There was no apology from Zuckerberg. Mehta declined to comment for this story.

Current and former Meta employees, who requested anonymity to speak freely about the matter, say there is widespread fear within the company. That’s in part because of a series of layoffs in August, followed by further layoffs expected this year, including the possibility of another round later in the year.

Finance chief Susan Lee said on the company’s first-quarter earnings call that management “doesn’t really know what the optimal size of the company will be going forward.” Regarding investments in AI, Lee said, “Our experience has been that we continue to underestimate our computing needs, even as we significantly increase capacity as AI continues to advance and our teams continue to identify exciting new projects and initiatives.”

Across the tech industry, workers are watching as stock prices soar and AI startups’ valuations soar to skyrocketing heights, even as employers simultaneously cut jobs due to the rapidly emerging power of AI. According to Layoffs.fyi, 137 tech companies have cut about 110,000 jobs so far in 2026, after about 125,000 layoffs all of last year.

At the current pace, layoffs could approach a peak in 2023. At the time, more than 260,000 jobs were cut as many software and digital media companies right-sized in response to the coronavirus hiring boom.

Umesh Ramakrishnan, chief strategy officer at executive search firm Kingsley Gate, said the current trend of AI displacing jobs is tough on workers but welcomed by investors.

“It’s easy to say to someone, ‘Hey, listen, I made a mistake by hiring more people than I needed,'” Ramakrishnan says. “The world now understands that jobs are being replaced by machines. If we don’t, shareholders will be angry.”

Cisco The company is the latest tech giant to make such an announcement, telling investors last week along with its quarterly results that it would cut fewer than 4,000 jobs.

“The companies that will win in the AI ​​era will be those with the focus, urgency, and discipline to continually shift investments toward areas where demand and long-term value creation are strongest,” Cisco CEO Chuck Robbins said in a blog post titled “Our Way Forward.”

Cisco stock soared more than 13% on Thursday, its best day since 2011, after the company reported better-than-expected results and raised guidance on AI infrastructure.

Wall Street remains unconvinced by Meta’s story, largely because the company’s AI strategy remains decentralized and largely fluid. The company’s stock price is down about 7% so far this year and nearly 5% over the past 12 months, underperforming all mega-cap peers except the company. microsoft.

Regardless of investors’ fears, sentiment within the company has grown more intense, with some longtime staffers questioning Meta’s pursuit of AI under AI chief Alexander Wang and considering whether to leave now for opportunities at other companies in the AI ​​race, according to current and former employees.

Data collected by Blind, an anonymous professional network that requires users to verify employment with a work email address, reveals some of the internal unrest.

Meta’s overall rating of Blind by employees has declined by 25% from its peak in Q2 2024 to this quarter, while ratings of company culture have declined by 39%. In every category other than compensation. Meta’s ratings have declined and it is significantly below its rivals. Amazon, google and neflixThis was revealed by blind data.

The company’s AI-powered Full Court Press recently debuted an employee tracking tool aimed at collecting data from staff actions, such as mouse movements and keystrokes on work computers. The Model Capability Initiative (MCI), as the name suggests, is part of Meta’s efforts to train AI models to power digital agents capable of performing a variety of coding and white-collar tasks.

Employees characterized the data-tracking tool as “dystopian,” and some expressed concern that personal information could be compromised, according to messages seen by CNBC. Sources said some Meta employees have noted that their workplace computers have become slower since the company started the project, adding to their dissatisfaction.

Meth workers responded by creating an online petition calling on Zuckerberg and management to halt the project.

“The collection and reuse of this type of data raises serious concerns about privacy, consent, and trust in the workplace,” the petition says. “It should not be the norm for companies of any size to extract and exploit employee data for AI training purposes without their consent.”

Leo Bushu, assistant professor of information systems at the University of Washington’s Foster School of Business, said Meta is one of many companies currently rethinking their employees and operations to address “the fact that AI is changing the way we work.”

Bushu said one goal could be to increase fear and pressure, using AI-related threats and layoffs as “weapons that enable cultural change.” But he said this could also reflect “inadequate management that doesn’t know how to make this happen in a way that’s more comfortable for employees.”

—CNBC’s Stephen Desaulniers and Lora Kolodny contributed to this report.

Of note: The overall numbers for the meta were impressive, says Jim Cramer.