Mark Zuckerberg admits Meta AI agents aren't progressing as fast as he hoped after major layoffs

Mark Zuckerberg tells staff that AI agents haven't progressed as quickly as he'd hoped

Replacing people with AI doesn't seem to be that easy to do, if Meta can be seen as an example. Reuters reports that at an internal town hall Thursday, CEO Mark Zuckerberg told staff that the pace of AI agent development had not "accelerated in the way" as executives had previously expected them to. Earlier this year, Meta laid off some 8,000 employees -- approximately 10 percent of its corporate workforce -- and reassigned another 7,000 to various AI groups, including one called Agent Transformation, Bloomberg reported. During this week's meeting, Zuckerberg apparently commented on these job cuts -- noting that they were not as "clean" as they should have been. The cuts were made because top officials at the company "were worried that we weren't going to move fast enough to adapt" to the changing landscape of the tech industry, Zuckerberg reportedly added. The corporate leader also apparently said that the perceived upside of the new AI-focused company structure hadn't "come to fruition yet," although he said that he believed the company would begin to see improvements from its AI investments during the next three to six months. Several other investigative reports have depicted Meta's months-old AI unit as a soul-crushing gulag, according to some of the engineers assigned to it. Meta has invested heavily in AI, and is expected to spend as much as $145 billion on AI infrastructure this year, Reuters reports. TechCrunch reached out to Meta for comment.

EXCLUSIVE: Zuckerberg says AI agent development going slower than expected

NEW YORK, July 2 (Reuters) - Meta (META.O), opens new tab Chief Executive Mark Zuckerberg told an internal town hall on Thursday that AI agent development over the ⁠last four months has not "accelerated in the way we expected," according to a recording heard by Reuters. Zuckerberg added that a company reorganization ⁠that included major job cuts had not been as "clean" as it ⁠could have been and that the company's bets on ⁠the new structure "haven't come to fruition ⁠yet." Reporting by Katie Paul; Editing by Peter Henderson and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab

Zuckerberg says Meta's AI agent progress is slower than expected

The Meta CEO told staff that agentic development hasn't accelerated the way executives predicted when they restructured the company's AI division in January. Mark Zuckerberg told Meta employees on Thursday that the company's AI agents have not progressed as quickly as he expected, four months after a restructuring that was supposed to speed things up. "The kind of trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," he said at an internal town hall, according to Reuters. The admission lands awkwardly against the scale of what Meta has already spent chasing that acceleration. The company is projected to spend up to $145 billion on AI infrastructure this year, part of a restructuring that included cutting roughly 8,000 jobs in May while simultaneously moving thousands of staff onto AI-focused teams. Zuckerberg said that when the reorganisation was being planned in January and February, executives were "super optimistic" about coding tools such as Anthropic's Claude Code, and had expected that optimism to translate into faster agentic progress across Meta's own products. It hasn't, by his own account. He told staff the bets made during that period "haven't come to fruition yet," and acknowledged the reorganisation itself wasn't as clean as it could have been, with the timing of the changes partly driven by fear that Meta "weren't going to move fast enough to adapt." That fear was not abstract. Reuters reported that around 7,000 employees were reassigned into AI roles the same week roughly 10% of the global workforce was cut, a reshuffle Zuckerberg had previously framed to staff as a matter of capital spending priorities rather than AI itself replacing jobs. That framing traces back to an earlier town hall in May, where he told employees the company runs on two cost centres, compute and people, and that headcount would keep bending toward the former. Despite the shortfall, Zuckerberg struck a forward-looking note on the timeline, telling employees he expects Meta to see "more significant benefits" from its AI investments within the next three to six months. He did not specify which products or teams would deliver those benefits, and a Meta spokesperson declined to comment when contacted by Reuters. The same town hall covered a separate, thornier issue. Meta's chief technology officer, Andrew Bosworth, told staff that an internal review had found no employee data from a paused mouse tracking and keystroke monitoring tool had been used to train Meta's AI models. That tool, part of what the company calls its Model Capability Initiative, was rolled out in April without an opt-out option, prompting internal pushback before it was paused. Bosworth said the programme may now resume, but only on an opt-in basis, a reversal from its original design. Meta's struggles with agentic AI sit alongside broader strain inside its AI organisation. Engineers inside the company's Applied AI unit have described the unit's working conditions as punishing since the restructuring pulled staff in from other parts of the business. Zuckerberg's comments suggest the culture strain and the technical delays are, at minimum, running on parallel tracks, whatever the actual causal relationship between them turns out to be. Meta is not alone in treating agents as the next competitive front. Rivals including OpenAI, Google and Anthropic have all pushed agentic products this year, betting that AI systems capable of completing multi-step tasks without constant human prompting will be the feature that justifies the industry's spending. Zuckerberg's comments are among the more candid admissions from a major AI lab that the underlying technology has not moved as fast as the spending implies. Meta reports second-quarter earnings later this month, which will give investors their first chance to ask Zuckerberg directly how the gap between capital outlay and agentic progress squares with the company's spending guidance for the rest of the year.

Mark Zuckerberg admits the AI restructuring isn't going all that great, report says

Hello, fellow humans. I've got a thing or two to admit about our AI restructuring. Credit: Tom Williams / Getty Images Remember when Meta laid off 8,000 people in May, citing an AI push, and moved another 7,000 employees into AI-focused roles? At the time, CEO Mark Zuckerberg said (in an internal memo) that "AI is the most consequential technology of our lifetimes," and that "the companies that lead the way will define the next generation." Well, it appears one company that "led the way" is having second thoughts. In an internal town hall on Thursday, examined by Reuters, Zuckerberg admitted that AI agents had not progressed as quickly as he had expected. Additionally, according to the report, the CEO said that Meta's AI-related restructuring wasn't as "clean" as it could have been, and that Meta execs miscalculated the timing of the changes. Apparently some of the "top people" at Meta were worried, early this year, that Meta isn't adapting to the new, AI-driven world fast enough. Hopefully there were some humans listening to him in that town hall. Meta's actions resulted in a company-wide backlash over AI-related employee tracking, as well as reported low employee morale, which Meta addressed with snacks, among other measures. Meta isn't exactly changing course, though. Zuckerberg reportedly expects more significant benefits from its AI investments within the next three to six months. We've got snacks over here, and we're waiting.

Zuckerberg Admits That AI Is Not Working Out the Way He Imagined

Can't-miss innovations from the bleeding edge of science and tech Meta CEO Mark Zuckerberg is struggling to keep his AI team together. As morale is hitting rock-bottom, his company is heavily relying on its competitors' AI models to build out its own in-house tools. And despite the many billions of dollars the company has spent in its flailing efforts to keep up in the AI race, even Zuckerberg himself is now acknowledging that progress is nowhere near where he wanted it to be. As Reuters reports, Zuckerberg admitted during a town hall last week that AI agents in particular aren't progressing as fast as he anticipated, a devastating revelation following enormous layoffs that wiped out thousands of roles at the company. The "trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," he said according to a recording obtained by Reuters. The reorganization effort's timing was miscalculated and the job cuts were not "clean," Zuckerberg said, while arguing that the plan had yet to "come to fruition." It's only the latest indication of major chaos behind the scenes as the tech giant struggles to remain relevant in an AI race being fought out by its competitors. That's despite Meta committing to spending a stunning $145 billion on AI infrastructure this year alone, a record sum that could've paid for an untold number of salaries. It also highlights a growing trend of tech companies realizing that replacing human workers with AI is vastly more difficult than anticipated, with some going as far as to rehire those who were let go. Beyond Meta's frantic AI efforts, company leaders also had to address yet another major sore point during last week's town hall. Last month, Meta was forced to pause its controversial employee tracking program -- which was designed to record everything workers do on their work computer to gather data for AI -- after sensitive employee information was leaked internally. Meta CTO Andrew Bosworth vowed that the program would be "opt-in" if it's ever turned on again. "For people who are comfortable, that's great, they can contribute to this kind of great human ⁠survey," he said at last week's town hall. "To people who are not, it is not an issue." Despite major warning signs, Zuckerberg remains optimistic. According to the CEO, Meta could see major benefits from its steep AI investments in as little as three to six months from now -- but given the story so far, there are plenty of reasons to be skeptical.

Mark Zuckerberg says Meta's agentic AI efforts aren't progressing as fast as he'd hoped

Mark Zuckerberg says Meta's agentic AI efforts aren't progressing as fast as he'd hoped Meta Platforms Inc. Chief Executive Mark Zuckerberg told employees at an internal town hall meeting that the company's work on artificial intelligence agents hasn't progressed as quickly as he'd hoped. It's a rare admission from the founder that not everything is going to plan as it tries to turn its multibillion-dollar investments into AI into something that provides genuine value to business and consumers alike. Reuters reports that Zuckerberg (pictured) told employees that AI agent development "has not accelerated in the way we expected" over the last four months. He also admitted that a company organization that involved significant job cuts wasn't as clean as it could have been, adding that its bets on the new structure "haven't come to fruition yet." It's a very different message from the one Zuckerberg signaled to investors back in January, when he promised a slate of new AI models and products would be coming to the company's platforms "over the coming months." The founder singled out agentic shopping as one area of focus, with Meta leveraging the unique context it has of its user base, such as their social graphs, content histories, relationships and personal interests. But so far, shopping agents are nowhere to be found on platforms such as Facebook and Instagram. The delays could be problematic, because Zuckerberg has bet an awful lot on AI agents helping to deliver a return on the billions of dollars it has thrown into AI infrastructure. In April, Meta increased its capital expenditure forecast to between $125 billion and $145 billion, up from an earlier forecast of $115 billion to $135 billion. But it's not clear when the company will start to see any payoff. At the town hall, Zuckerberg insisted that the company should start seeing more substantial benefits from its spending within the next three to six months. That would mean towards the end of 2026, more than a year after Meta first created its Superintelligence Labs unit and shifted more workers to focus on AI projects. At the town hall, Zuckerberg also conceded that he'd made some mistakes in that workforce readjustment, and added that he will "almost certainly make more." According to Reuters, Meta has laid off around 10% of its employees this year and transferred over 7,000 to work on AI initiatives. Meta is betting on its ability to build reliable autonomous agents that can perform work on behalf of humans in areas such as commerce, advertising, software engineering and as consumer assistants. At the same time, it's dramatically expanding its data center infrastructure to support these envisioned workloads. The company unveiled an initiative called Meta Compute in January that aims to build tens of gigawatts of AI compute capacity over the next 10 years. Earlier this week, we learned more about the company's plans when Axios reported that it's also considering selling some of that capacity to other customers. That would give Meta a way to monetize its infrastructure in the event that its agentic plans are further delayed. Meta Chief Technology Officer Andrew Bosworth was also at the town hall, speaking about the company's controversial agent training initiative that launched in April. The program saw Meta forcibly install software on employees' computers that would track mouse movements and keyboard inputs in order to create data that can be used to teach agents how to operate computers. According to Bosworth, a review of a recent data security incident involving that software found that no personal data from its employees has been used for AI training purposes. The review followed a decision to halt the program last month, while the company investigated an incident which resulted in sensitive data being exposed. Bosworth said that if his team decides to restart the project, it will no longer be mandatory, but opt-in. No doubt, Meta views the program as key to getting its AI agent plans back on track, but it's not clear if enough employees would be willing to opt into it to make a difference, or if the company is even willing to risk further controversy. For now, Meta still has its core advertising business, which throws off enough cash to sustain its enormous spending for now, but there will come a point when the company's investors will start to demand some results.

AI Agent Development at Meta is Lagging: Zuckerberg

Mark Zuckerberg's comments came on the same day that Meta expanded its Meta Business Agent globally for businesses on Instagram, Messenger and WhatsApp. Meta CEO Mark Zuckerberg said AI agent development at the firm is progressing more slowly than expected, even as technology and crypto firms continue pouring resources into the nascent technology. In a company meeting on Thursday, Zuckerberg said the "trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," according to Reuters, which reviewed a recording of the call. The bet on agent adoption hasn't "come to fruition yet," Zuckerberg said, adding that executives made an aggressive push into agentic infrastructure in January in part because of fears they weren't moving "fast enough." Despite the slower progress, Zuckerberg said he expects the firm's AI investments to start paying off within the next three to six months. Zuckerberg's comments offer a reality check for technology and crypto firms betting that autonomous agents will soon become major users of blockchain payments. Meta, along with several crypto firms, has bet big on agentic AI, with many pivoting their business models to cater to autonomous AI agents. In May, Meta cut roughly 10% of its workforce and reassigned about 7,000 employees to AI-focused teams -- a restructuring Zuckerberg acknowledged was not as clean as it could have been, with executives miscalculating the timing. Meta expands AI agent feature on three platforms Zuckerberg's concerns come as Meta expanded its Meta Business Agent globally for businesses on Instagram, Messenger and WhatsApp on Thursday. The Business Agent can respond to customer inquiries, make product recommendations and close sales without human intervention, Meta said. Zuckerberg also revealed in March that he was building a personal AI agent designed to support his decision-making as CEO. The crypto industry has been a keen adopter of the technology, with Coinbase CEO Brian Armstrong and Circle CEO Jeremy Allaire among the executives predicting that AI agents will become the dominant users of blockchain-based payments in the coming years. Several notable integrations advancing AI agent-driven stablecoin spending have emerged in recent months, including one by Amazon Web Services in May, when it integrated Coinbase's x402 payments protocol into Amazon Bedrock AgentCore, allowing agents to transact in the USDC (USDC) stablecoin. In April, crypto wallet startup Oobit launched a Visa-supported virtual card for AI agents to make online purchases in USDt (USDT) on behalf of businesses. AI agent payments adoption lagging Despite the integrations, data shows that AI-agent transaction activity on the blockchain remains relatively small, with Artemis data showing that only $2 million in trading volume has been facilitated through the AI agent-supported x402 protocol over the past 30 days. Monthly change in x402 transaction volume over the past 12 months. Source: Artemis

Meta AI agents: Meta's Mark Zuckerberg says AI agent tech progressing slower than expected

Zuckerberg and other Meta executives have been seeking to moderate some of ⁠the organizational ⁠changes introduced earlier this year, without fundamentally changing course. The company laid off about 10% of its global workforce and reassigned roughly 7,000 employees to AI-focused teams in May, moves that prompted employee pushback and raised concerns about morale. Meta Chief Executive Mark Zuckerberg acknowledged shortcomings in the company's sweeping restructuring at an internal town hall on Thursday, saying the systems known as AI agents had not progressed as quickly as he had expected, according to a recording heard by Reuters. Zuckerberg added that a company reorganization that included major job cuts was not as "clean" as it could have been and that executives had miscalculated on the timing of the changes. Zuckerberg and other Meta executives have been seeking to moderate some of ⁠the organizational ⁠changes introduced earlier this year, without fundamentally changing course. The company laid off about 10% of its global workforce and reassigned roughly 7,000 employees to AI-focused teams in May, moves that prompted employee pushback and raised concerns about morale. The changes were part of a broader restructuring aimed at funding costly investments in artificial intelligence infrastructure and positioning Meta to capitalize on efficiency gains from AI-assisted work. Zuckerberg told employees in May that he did not expect further companywide layoffs this year, though some workers were skeptical. In retrospect, he said, the "trajectory of the agentic development over at least ⁠the last four months hasn't really accelerated in the way that we expected," and that the company's bets on the new structure "haven't come to fruition yet." Zuckerberg was referring to AI agents, automated systems that can ⁠execute tasks on behalf of a user. Conversations he was having "with our top people" when they started planning the restructuring in January and February "were that they were worried that we weren't going to move fast enough to adapt," Zuckerberg said. At the time, he said, executives were "super optimistic" about tools like Claude Code from AI startup Anthropic. Meta is projected to spend as much as $145 billion on AI infrastructure this year, a significant portion of Big Tech's more than $700 billion outlay on the technology. Zuckerberg said he expects that the social media giant will begin to experience more significant benefits from its AI investments within the next three to six months. A Meta spokesperson declined to comment on Thursday. MOUSE-TRACKING SOFTWARE REVIEW In the same town hall, Meta's chief technology officer, Andrew Bosworth, said a review of a recent data security incident with the company's controversial mouse-tracking software indicated that no ⁠employee data was included in AI training. Last month, Meta paused the program, which tracks employee mouse movements and digital activity for AI training, while investigating the exposure of sensitive data. If the company turns the program back on once the review is completed, it will be on an "opt-in" basis, he said. "For people who are comfortable, that's great, they can contribute to this kind of great human survey. To people who are not, it is not an issue," he told employees at the town hall on Thursday. When Meta first installed the program on U.S. employees' computers in April, Bosworth told them there was no way to opt out.

Mark Zuckerberg Admits AI Bets 'Haven't Come to Fruition Yet' and Meta Layoffs Were 'Not as Clean' as Pla

Zuckerberg Says Meta's AI Agent Progress Has Been Slower Than Expected Zuckerberg made the remarks during an internal town hall, according to a recording reviewed by Reuters, admitting that Meta's expectations for AI agents have not materialized as quickly as leadership had forecast. The "trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," Zuckerberg said. He added that the company's bets on its new organizational structure "haven't come to fruition yet." Meta did not immediately respond to Benzinga's request for comments. Meta's AI Restructuring Included Layoffs And Team Reassignments In May, Meta cut about 10% of its global workforce and reassigned roughly 7,000 employees to AI-focused teams as part of a broader restructuring designed to support its growing investments in artificial intelligence. Zuckerberg said the reorganization did not unfold as "clean" as planned, acknowledging that executives misjudged the timing of the changes. He told employees that leadership had been "super optimistic" earlier this year, believing advances in AI tools -- including coding assistants such as Anthropic's Claude Code -- would arrive faster. Executives feared Meta risked falling behind competitors if it did not move aggressively, he said. Despite the slower-than-expected progress, Zuckerberg said he expects Meta to begin seeing more meaningful returns from its AI investments within the next three to six months. Meta Addresses Employee Monitoring Concerns Bosworth said the investigation found no employee data had been used to train AI models. If the program is reinstated, participation will be voluntary. "For people who are comfortable, that's great... To people who are not, it is not an issue," Bosworth told employees, noting the program would operate on an opt-in basis if it returns. Price Action: Meta shares closed Thursday down 4.90% at $582.90 and edged up 0.34% to $584.88 in after-hours trading, according to Benzinga Pro. According to Benzinga Edge Rankings, Meta scores in the 88th percentile for growth, though the stock has posted negative medium- and long-term returns while maintaining a positive short-term price trend. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Meta's Zuckerberg says AI agent tech progressing slower than expected

Meta Chief Executive Mark Zuckerberg acknowledged shortcomings in the company's sweeping restructuring at an internal town hall on Thursday, saying the systems known as AI agents had not progressed as quickly as he had expected, according to a recording heard by Reuters. Zuckerberg added that a company reorganization that included major job cuts was not as "clean" as it could have been and that executives had miscalculated on the timing of the changes. Zuckerberg and other Meta executives have been seeking to moderate some of the organizational changes introduced earlier this year, without fundamentally changing course. The company laid off ⁠about 10% of its global workforce and reassigned roughly 7,000 employees to AI-focused teams in May, moves that prompted employee pushback and raised concerns about morale. The changes were part of a broader restructuring aimed at funding costly investments in artificial intelligence infrastructure and positioning Meta to capitalize on efficiency gains from AI-assisted work. Zuckerberg told employees in May that he did not expect further companywide layoffs this year, though some workers were skeptical. In retrospect, he said, the "trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," and that the company's bets on the new structure "haven't come to fruition yet." Zuckerberg was referring to AI agents, automated systems that can execute tasks on behalf of a user. Conversations he was having "with our top people" when they started planning the restructuring in January and February "were that they were ⁠worried that we weren't going to move fast enough to adapt," Zuckerberg said. At the time, he said, executives were "super optimistic" about tools like Claude Code from AI startup Anthropic. Meta is projected to spend as much as $145 billion on AI infrastructure this year, a significant portion of Big Tech's more than $700 billion outlay on the technology. Zuckerberg said he expects that the social media giant will begin to experience more significant benefits from its AI investments within the next three to ⁠six months. A Meta spokesperson declined to comment on Thursday. Mouse-tracking software review In the same town hall, Meta's chief technology officer, Andrew Bosworth, said a review of a recent data security incident with the company's controversial mouse-tracking software indicated that no employee data was included in AI training. Last month, Meta paused the program, which tracks employee mouse movements ⁠and digital activity for AI training, while investigating the exposure of sensitive data. If the company turns the program back on once the review is completed, it will be on an "opt-in" basis, he said. "For people who are comfortable, that's great, they can contribute to this kind of great human ⁠survey. To people who are not, it is not an issue," he told employees at the town hall on Thursday. When Meta first installed the program on U.S. employees' computers in April, Bosworth told them there was no way to opt out.

Zuckerberg Tells Meta Employees AI Agents Are Advancing Slower Than Expected | PYMNTS.com

Zuckerberg made the remarks at an internal town hall, according to a recording heard by Reuters. He acknowledged that a company reorganization that included major job cuts was not as "clean" as it could have been and that executives had miscalculated on the timing. Meta laid off about 10% of its global workforce in May and moved roughly 7,000 employees to AI-focused teams, Reuters reported. The restructuring was designed to fund heavy AI infrastructure investments and position the company to capture efficiency gains from AI-assisted work. "The trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," Zuckerberg said, per the Reuters report, adding that the company's bets on the new structure "haven't come to fruition yet." He said executives had been "super optimistic" about tools like Anthropic's Claude Code when planning began in January and February. He still expects Meta to see more significant benefits from its AI investments within the next three to six months. At the same town hall, Meta CTO Andrew Bosworth addressed a review of a data security incident tied to the company's mouse-tracking software, which monitors employee activity for AI training. The review found no employee data was included in AI training, Reuters reported. Meta paused the program last month and may restore it on an opt-in basis, a reversal from April, when employees were told they could not opt out. Zuckerberg's caution contrasts with momentum elsewhere. PYMNTS reported that Visa, Mastercard and American Express are building agentic commerce into their core networks, that Goldman Sachs projects AI agents will drive a 24-fold increase in token consumption by 2030, and that Adyen's agentic commerce lead rates the market at just 0.5 on a five-point scale, with the hard work sitting in payments plumbing rather than the AI itself. For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.

Zuckerberg: Meta's AI reorganization goals 'haven't come to fruition'

Shares of Meta Platforms (META) have struggled in 2026, despite the company's aggressive push into artificial intelligence. The stock is down 11.7% year to date through July 2, trailing the S&P 500's roughly 9% gain over the same period. On July 2, Meta's CEO Mark Zuckerberg acknowledged that the company's AI reorganization has not delivered the progress executives had hoped for, according to a recording heard by Reuters. Zuckerberg told employees during an internal town hall that Meta's AI agents have developed more slowly than expected and admitted the company's restructuring has fallen short so far. "The trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," Zuckerberg said. Zuckerberg added that Meta's bets on its new organizational structure "haven't come to fruition yet." He was referring to AI agents, automated systems that can execute tasks on behalf of a user. He also acknowledged that the company's reorganization, which included major layoffs, "was not as 'clean' as it could have been" and said executives misjudged the timing of the changes. The restructuring included cutting about 10% of Meta's workforce and reassigning roughly 7,000 employees to AI-focused teams in May as the company shifted resources toward artificial intelligence. Despite the slower progress, Zuckerberg said he expects Meta to begin seeing more meaningful returns from its AI investments within the next three to six months. He also noted that executives were "super optimistic" earlier this year about AI coding tools such as Anthropic's Claude Code. Meta is expected to spend as much as $145 billion on AI infrastructure this year, making it one of the biggest AI investors among Big Tech's more than $700 billion spending. How Meta's first quarter sets the stage for its Q2 earnings report Meta reported first-quarter results on April 29 that beat Wall Street expectations. The social media giant earned adjusted earnings per share of $7.31, topping estimates of $6.79. Revenue climbed 33% year over year to $56.31 billion, ahead of the $55.45 billion consensus and marking Meta's fastest revenue growth since 2021. However, investors focused on slowing user growth and higher AI spending. Daily active people reached 3.56 billion during the quarter, up 4% from a year ago but below analysts' expectations of 3.62 billion. Meta attributed the shortfall to internet disruptions in Iran and restrictions on WhatsApp access in Russia. Capital expenditures totaled $19.84 billion for the quarter, below Wall Street estimates of $27.57 billion. Still, Meta raised its full-year capital expenditure outlook to $125 billion to $145 billion from its previous forecast of $115 billion to $135 billion. "This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity," Meta said in an announcement. Getty Images Analysts remain bullish on Meta stock Despite the stock's underperformance this year, some Wall Street analysts remain optimistic. On July 2, Wells Fargo analyst Ken Gawrelski raised his price target on Meta stock to $767 from $765, maintaining an overweight rating, The Fly reported. With Meta set to report earnings later this month, investors will be watching whether the company's AI investments begin to show results. Ahead of the report, the analyst expects "another quarter of robust ad growth and an in-line Q3 revenue guide." Wells Fargo also expects Meta to reaffirm its plans to continue spending aggressively on AI capacity while potentially highlighting opportunities to lease excess computing capacity. Overall, the firm said it sees "an improving second half of the year catalyst path." The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published July 3, 2026 at 7:33 PM.

Zuckerberg says Meta's AI agent progress slower than expected - Reuters By Investing.com

Investing.com-- Meta Platforms (NASDAQ:META) CEO Mark Zuckerberg told employees that development of artificial intelligence agents has progressed more slowly than the company anticipated, even as it ramps up spending on the technology, Reuters reported on Thursday, citing an internal town hall recording. Zuckerberg said AI agent development over the past four months had not "accelerated in the way we expected," prompting a reassessment of the company's recent restructuring, Reuters reported. Get real-time updates on market-moving news with InvestngPro He said Meta executives had been concerned earlier this year that the company was not moving quickly enough to adapt to rapid advances in AI and had been optimistic about tools such as Anthropic's Claude Code. However, those expectations have yet to materialize, he said. Meta is expected to spend up to $145 billion on AI infrastructure this year as part of Big Tech's broader investment push. Zuckerberg said he still expects more meaningful returns from those investments within the next three to six months, Reuters reported. Separately, Chief Technology Officer Andrew Bosworth said a review of a paused employee activity-tracking program found no employee data had been used for AI training, according to Reuters.

Meta's Zuckerberg says AI agent tech progressing slower than expected

NEW YORK, July 2 (Reuters) - Meta Chief Executive Mark Zuckerberg acknowledged shortcomings in the company's sweeping restructuring at an internal town hall on Thursday, saying the systems known as AI agents had not progressed as quickly as he had expected, according to a recording heard by Reuters. Zuckerberg added that a company reorganization that included major job cuts was not as "clean" as it could have been and that executives had miscalculated on the timing of the changes. Zuckerberg and other Meta executives have been seeking to moderate some of the organizational changes introduced earlier this year, without fundamentally changing course. The company laid off about 10% of its global workforce and reassigned roughly 7,000 employees to AI-focused teams in May, moves that prompted employee pushback and raised concerns about morale. The changes were part of a broader restructuring aimed at funding costly investments in artificial intelligence infrastructure and positioning Meta to capitalize on efficiency gains from AI-assisted work. Zuckerberg told employees in May that he did not expect further companywide layoffs this year, though some workers were skeptical. In retrospect, he said, the "trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," and that the company's bets on the new structure "haven't come to fruition yet." Zuckerberg was referring to AI agents, automated systems that can execute tasks on behalf of a user. Conversations he was having "with our top people" when they started planning the restructuring in January and February "were that they were worried that we weren't going to move fast enough to adapt," Zuckerberg said. At the time, he said, executives were "super optimistic" about tools like Claude Code from AI startup Anthropic. Meta is projected to spend as much as $145 billion on AI infrastructure this year, a significant portion of Big Tech's more than $700 billion outlay on the technology. Zuckerberg said he expects that the social media giant will begin to experience more significant benefits from its AI investments within the next three to six months. A Meta spokesperson declined to comment on Thursday. MOUSE-TRACKING SOFTWARE REVIEW In the same town hall, Meta's chief technology officer, Andrew Bosworth, said a review of a recent data security incident with the company's controversial mouse-tracking software indicated that no employee data was included in AI training. Last month, Meta paused the program, which tracks employee mouse movements and digital activity for AI training, while investigating the exposure of sensitive data. If the company turns the program back on once the review is completed, it will be on an "opt-in" basis, he said. "For people who are comfortable, that's great, they can contribute to this kind of great human survey. To people who are not, it is not an issue," he told employees at the town hall on Thursday. When Meta first installed the program on U.S. employees' computers in April, Bosworth told them there was no way to opt out. (Reporting by Katie Paul in New York and Courtney Rozen in Washington; Additional reporting by Jaspreet Singh in Bengaluru; Editing by Peter Henderson and Matthew Lewis) By Katie Paul and Courtney Rozen

Mark Zuckerberg admitted that Meta's bet on AI Agents isn't working, here's why

In an internal town hall meeting yesterday, Zuckerberg admitted to Meta employees something the company had been trying hard not to say out loud this whole year. The AI agents Meta restructured its operations around, laid off 8,000 employees for, and tasked 7,000 more employees to develop, are not going to arrive on time after all. Also read: WhatsApp username row in India isn't about privacy vs security, but authentication Zuckerberg was reported by Reuters to have said in an internal meeting transcript that "the pace of development of these agents has not really accelerated the way that we expected" and that the company's restructuring plan "hasn't really paid off yet." Why is this revelation especially painful? Because Meta was not playing around at all in 2023. It fired about 10% of its workforce worldwide and allocated over 7,000 workers to AI projects, including an entire division devoted to what is known within the company as "Agent Transformation." This is not some experiment. This is a major company that was basing its structure on the assumption that autonomous software agents - programs capable of carrying out operations like digital employees - would be ready for implementation. They are not. And the way Zuckerberg himself justified why the company decided to bet on an agent-first strategy is even more telling than the fact itself. As Zuckerberg explained, in the months of January and February, when executives were planning a restructuring, they felt that Meta was moving too slow adapting to the industry's future direction. Back then, he continued, leaders were "super optimistic" about products like Claude Code from Anthropic, and essentially just extrapolated their momentum to the roadmap of the company. Also read: 5 best laptops with 64GB RAM in 2026: Alienware 16 Area-51, Lenovo Legion Pro 7 and more And this is the smoking gun right here. Meta didn't base its agentic strategy on any internal indicators. It saw what a competing lab was delivering, assumed the curve would continue bending in the same direction and reshaped an organization of tens of thousands people based on that assumption. As the curve flattened out, the organizational chart had nowhere to run. Zuckerberg admitted that the layoffs themselves weren't handled correctly as the process wasn't as "clean" as it should have been. The timing of the process was misjudged as well. It's the same executive who told his staff that he "will almost certainly" be making more mistakes in the future. This doesn't mean Meta abandons agents. The company is still expected to invest as much as $145 billion into AI infrastructure development this year, which is just a part of the Big Tech spending spree that already exceeded $700 billion. According to Zuckerberg, the company expects tangible results in 3 to 6 months from now. This is just the same optimistic period that led Meta here. More important for the industry is the following. If the company that was the quickest to adapt to agentic AI technology openly admits that the technology hasn't reached its peak yet, the roadmaps of all the other vendors should be subjected to the same analysis.

Meta CEO Mark Zuckerberg says AI agents have not progressed as he expected

The company's bets on the new structure "haven't come to fruition yet," he added. Meta CEO Mark Zuckerberg has admitted that the company's AI plans have not moved forward as quickly as he had expected. Speaking during an internal town hall on Thursday, Zuckerberg said the company's recent restructuring had also not gone as smoothly as planned. According to a recording heard by Reuters, Zuckerberg said Meta's efforts around AI agents have fallen short of expectations. Looking back at the past few months, Zuckerberg said, the "trajectory of the agentic development over at least the last four months hasn't really accelerated in the way that we expected," and that the company's bets on the new structure "haven't come to fruition yet." Earlier this year, Meta made major changes across the company as part of its AI strategy. In May, the company cut about 10 percent of its global workforce and moved around 7,000 employees into AI-focused teams. The changes were made to support Meta's growing investment in AI and improve efficiency with AI-powered tools. Also read: Zoho's Arattai to drop username based account feature amid WhatsApp controversy, cites regulatory change During the town hall, Zuckerberg admitted the process was not as "clean" as it could have been. He also said company leaders had misjudged the timing of the changes. Explaining why Meta moved so quickly, Zuckerberg said conversations he was having "with our top people" when they started planning the restructuring in January and February "were that they were worried that we weren't going to move fast enough to adapt."He added that company executives were "super optimistic" at the time about AI coding tools such as Claude Code from Anthropic. Despite the slower-than-expected progress, Zuckerberg said he remains confident about Meta's AI investments. He told employees that the company should start seeing more significant benefits over the next three to six months. Also read: Govt to act against Telegram, Signal after WhatsApp: Here are 5 major security concerns around username feature In the same town hall, Meta chief technology officer Andrew Bosworth also spoke about the company's employee activity tracking software. The program, which tracks mouse movements and digital activity for AI training, was paused last month. Bosworth said the review found that no employee data had been used to train AI systems. He added that if the program returns, it will be optional for employees. "For people who are comfortable, that's great, they can contribute to this kind of great human survey. To people who are not, it is not an issue," Bosworth said.